Bank of America: Cryptocurrencies outperformed stocks in the Fed-initiated recession

The "macroeconomic outlook is deteriorating rapidly" and could lead to an exit for the world's largest economy, citing a report by Bank of America strategists.

Hartnett told bank clients that most assets would face significant volatility if language such as "inflation shocks are worsening, interest rate shocks are just beginning, and recession shocks are imminent" were used. However, certain assets (such as bonds and equities) will outperform others.

In fact, the bank has backed a variety of horses to come out on top in the face of a potential recession, including cash, commodities and, interestingly, cryptocurrencies.

What's the deal with crypto?

Those who follow the cryptocurrency business and Wall Street's overall approach to it may be surprised to see Bank of America choosing digital assets as a possible best performer. In fact, it wasn't that long ago that Bank of America and many other financial institutions were regularly hurling insults at Bitcoin and the industry as a whole.

We won't go into detail about the reversals by JPMorgan, Goldman Sachs and Citigroup. Let's start with Bank of America.

After years of ignoring the asset class, Bank of America declared in March 2021 that Bitcoin is highly volatile, making it "impractical as a means of storing wealth or fortune" as a payment mechanism."