Bitcoin becomes More Overcrowded Trade After Passing ‘Long Tech’: Bank of America Survey

“Long bitcoin” – a bullish bet on the highest cryptocurrency – is now the most crowded trade in financial markets, according to a Bank of America survey of fund managers in January.

Published by Reuters on Tuesday, the research is evidence of bitcoin’s growing popularity as an investment asset. Widely touted as digital gold and inflation hedging, the leading cryptocurrency by market value has increased by over 230% in the past three months due to institutional demand. Prices clocked highs above $ 41,900 earlier this month.

According to the survey, bitcoin has chosen “long technology” (bullish bets on large tech companies) as the most crowded trade – that is, the one that sees the largest capital inflow. The news marks the first time long technology has been pushed from the top position since October.

Meanwhile, betting against the US dollar (“short USD”) is now the third most popular trade.

The US batch dollar has recovered some turmoil in recent days, tracking an increase in US Treasury yields. The Dollar Index, which tracks the value of the greenback, is currently at 90.50, up 1.4% from the multi-year low of 89.21 seen on January 6. The minor bounce may have helping to put the brakes on a bitcoin bull run.

However, other details in the survey may boost the cryptocurrency in its role as an inflation hedge.

“Record inflation expectations: record high 92% of investors in the BofA Fund Manager Survey expect higher inflation in the next 12 months,” tweets macro analyst Holger Zschaepitz.