The crypto market will continue to fall as the US Federal Reserve raises interest rates, JPMorgan chief global strategist David Kelly said in an interview with Business Insider. According to him, the actions of the Fed will put an end to the era of “crazy speculation” in the digital asset market. He said:
“I am waiting for a huge decline in the cryptocurrency market, because there is nothing there.”
The JPMorgan strategist has explained when interest rates rise, investors stop investing in “crazy ideas” because they prefer projects that bring real economic returns. Kelly has attributed the significant growth of the crypto market in recent years to the stimulus measures of the Fed in connection with the pandemic, which provoked a decrease in bond yields. This has encouraged investors to invest in cryptocurrencies and other high-risk assets, Kelly explained.
At the end of January, the price of Bitcoin fell to $32,800 for the first time since July 2021. Then the total capitalization of the crypto market fell below $1.7 trillion. Today, the cryptocurrency is trading at below $41,000 and the digital asset market is valued at $2 trillion.