JPMorgan reportedly advises investors to stay away from crypto amid recession risks

David Kelly, the chief global strategist at JPMorgan Asset Management, reportedly warned investors to avoid crypto amid the threat of a recession.

As Bloomberg reported, David Kelly noted a high risk of recession and further volatility.

“The economy has got one foot into a recession and the other on the banana peel now,” he said.

These comments come after US Fed head Jerome Powell gave a speech at the Fed’s annual meeting that rattled markets on August 26. Powell outlined the Fed’s primary goal as bringing inflation back down to 2% and therefore does not plan to lower interest rates in the short term.

“The Federal Reserve is overestimating the strength of the US economy as it feels guilty about the fact that inflation went up under their watch,” Kelly said.

Further, the JPMorgan strategist suggested the economy will feel “more normal” by the end of the next year. Meantime, he advised staying away from Bitcoin and tech stocks with large capitalization, as well as selling crypto.

“Make sure you overweight US and international value, as well as stocks with relatively low price-to-earnings ratio,” he added.

JPMorgan CEO Jamie Dimon was also known as a vocal critic of Bitcoin, previously calling it a “worthless” and “fool’s gold,” and at one point, saying that he would fire JPMorgan traders if they traded in it. But despite his skepticism, JPMorgan has begun offering its clients access to various crypto products.

Last summer, JPMorgan gave wealth management clients access to cryptocurrency funds, which means the bank’s financial advisers can accept, buy and sell orders from clients for five cryptocurrency products.

As well, JPMorgan had become the first bank in the metaverse, having opened the Onyx lounge in a blockchain-based virtual world, Decentraland. The bank said it sees “limitless” opportunities in the virtual world, with a new workforce and expanded virtual real-estate ownership financed by DAOs.