According to the findings of a recent Bank of America (BOA) survey, bitcoin purchases have now surpassed technology stocks as the most crowded trade. This new position means technology stocks have been downgraded to second place for the first time since October 2019.
Still, most fund managers interviewed believe bitcoin is “supposed to be in a bubble.” As a result, as the Reuters report points out, a majority of these respondents predict that the value of bitcoin will halve within 12 months.
Since the beginning of 2021, bitcoin’s value has increased 30% from just under $ 29,300 to its highest ever (ATH) of over $ 41,900 on January 8. This 30% growth in value after just 8 days is following the crypto price rising by over 300% in 2020. However, at the time of writing, bitcoin is trading at just $ 34,400.
Meanwhile, another survey by Deutsche Bank finds that many investors currently view bitcoin as the single largest bubble. For example, when asked to rate bitcoin on the 1-10 bubble scale, nearly half of respondents gave 10 to the crypto asset. Tesla is the next asset to be labeled a bubble by respondents after the tech giant’s stock soared nearly 750%. “Tesla” is considered emblematic of high-priced technology stocks. “
However, in similar sentiments expressed by BOA survey respondents, the majority of respondents to the Deutsche Bank study predicted that bitcoin and Tesla stock in the next twelve months ie “more likely to halve than double in value . ”
Investor Risk Inversion
Meanwhile, in other findings, the BOA study states that “at most 19% of investors were taking more risk than usual in their investment portfolios.” The survey also found that “the proportion of BOA surveyed fund managers who said the global economy is in an early cycle, rather than a recession, is highest in 11 years.”
Furthermore, 92% expected higher global inflation over the next year, though a Deutsche Bank poll also shows that 71% expect the US Federal Reserve to resist the temptation to start removing the stimulus that has help marketers rally.
Do you agree that bitcoin is the biggest bubble ahead of tech stocks? Tell us what you think in the comments section below.
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