JPMorgan Bank Predicts 2020 US Recession: Is Bitcoin and Crypto a Viable Alternative?
Banking giant JPMorgan Chase predicts that there is a 60 percent chance that a recession will occur by 2020.
The big question that arises is whether cryptocurrency may be a solution to existing stores of value. Bloomberg reported,
“The probability of a U.S. recession within one year is almost 28 percent and rises to more than 60 percent over the next two years, researchers wrote in a note this week. Over the next three years, the odds are higher than 80 percent, according to the note.”
According to the Federal Reserve Bank of New York, there is a 14.5 percent chance of recession by the end of 2019 – this is completely different from JPMorgan Chase’s position.
The latter may be getting to different results because it uses a different model to track virtually every indicator that could contribute to the global economy. A few the indicators that the platform uses include compensation growth, consumer and business sentiments, and labor participation.
Amherst Pierpont chief economist Stephen Stanley suggested that 2020 could be considered premature for the next recession. However, he did share a sentiment with JPMorgan that though the US economy remains strong and has a low unemployment rate and a bull market, the risk of recession is something that continues. This may be obvious though, especially because the market is always prone to a recession based on the economic cycle.
Most US economists predict that a recession will occur within two to three years. David Altig of the federal Reserve of Atlanta disclosed that two thirds of business economists believe that trade issues will prompt the next crash or recession. As he stated,
“Trade issues are clearly influencing panelists views.”
Many are wondering whether crypto is an alternative. Financial institutions such as Fidelity, Goldman Sachs, and Citigroup have put infrastructure in place targeting institutional investors who plan to invest in digital assets. Banks and investment firms, though, have not invested in the crypto sector due to a lack of certainty.
Jim Hamel, Artisan Global Opportunities Fund manager explained that the digital payment industry experienced growth in recent years, leading investors to cryptocurrencies. He stated,
“There are a number of tailwinds contributing to this trend. First, we’re seeing rapid growth in e-commerce, which requires that customers be able to make secure digital payments. The growth in cross-border transactions and the general impact of an increasingly globalized marketplace are helping accelerate this trend.”