JPMorgan Chase has estimated the 60 percent chance for the next US recession to occur in 2020. In a global market accident, can crypto be a viable solution for existing value stores?
"The probability of a US recession in one year is exactly around 28 percent, and rises to more than 60 percent over the next two years, the researchers wrote in this week's note. "In the next three years, the odds are greater than 80 percent, as the record shows," Bloomberg reported.
Why do the experts predict the recession?
As indicated by the Federal Reserve Bank of New York, there is a 14.5 percent chance of a recession occurring before the end of 2019.
Stephen Stanley, chief economist at Amherst Pierpont, suggested that 2020 could be considered a premature period for the next US recession to occur but he echoed comparative sentiments for JPMorgan in that while the US economy remained solid with low unemployment and bull markets, still allowing the danger of recession in years to come.
Generally, most economists in the US estimate a recession will occur in the next few years. David Altig, research director of the Federal Reserve Bank of Atlanta and chairman of the Nabe survey, revealed that 66% of business economists in the US expect the market to fall before the end of 2020, mostly due to trade problems.
"Trade problems clearly influence panelists' views," Altig said, that the high-level trade and interest rates imposed by the Fed leave the US market vulnerable to medium-term accidents.
Is Crypto the Solution?
In the midst of a period where many economists predicted market crashes and recessions that were noteworthy in the next two years, crypto tensions had risen rapidly.
Although not depicted by significant cryptocurrency prices, financial institutions, for example, Fidelity, Goldman Sachs, and Citigroup have established infrastructure to target institutional investors who intend to invest in advanced asset markets.
Banks and investment companies have prevented them from building businesses in the cryptocurrency sector due to the absence of regulatory certainty in the market. Experts have stated that the sudden trend of major financial institutions entering the crypto market shows crypto demand from investors in the traditional financial sector has increased rapidly in the previous few months.
Like Jim Hamel, portfolio manager at Craftsman Global Opportunites Fund, the compressed payment industry has experienced exponential development in recent years, which can usually lead investors to the crypto currency.
"There are a number of things that add to this trend. First of all, we see a rapid development in e-commerce, which requires customers to make secure advanced payments. Developments in cross-border transactions and the increasingly globalized market's general effects help accelerate this trend. "