Analysts from J.P. Morgan ($JPM@US) said in a recent report that rising interest rates will cause problems for Bitcoin and rewards holders of Ethereum. Bitcoin has been booming because economies across the globe have dropped interest rates dramatically since the beginning of the COVID-19 pandemic. Bitcoin was seen as a hedge against inflation—almost like a crypto gold that could be used as the markets fluctuated. However, central banks around the world are cutting back on pandemic era monetary policies, planning to stop bond buying and raise interest rates. As a result, J.P. Morgan believes that investors should hold Ether, the world’s second-largest crypto-token, because it is much more versatile than Bitcoin. Bitcoin will not remain a safe haven for investors because interest rates will rise, inflation will drop and there will be less that an investor can do with Bitcoin. The same could be said for gold investors who tend to pull out of the market as interest rates rise once again. Crypto investors watching the markets carefully should note that the Bank of England said interest rates ‘would have to rise” while the Federal Reserve concluded its policy meetings by indicating bond tapering will begin and interest rates could rise twice in 2022.
