Deutsche Bank has conducted a survey on financial bubbles. Eighty-nine percent of respondents see some bubbles in financial markets, with bitcoin near the “extreme bubble” territory. However, more respondents expect the cryptocurrency to double than they do with Tesla stock.
Deutsche Bank Bubble Survey
A survey published Tuesday by Deutsche Bank asked 627 market professionals to rate from zero to 10 how they view financial bubbles in a range of assets. According to CNBC, the survey was conducted between January 13 and January 15. The bank found that 89% of survey respondents currently see some bubbles in financial markets.
Bitcoin is closest to the “extreme bubble” territory, followed by US technology equity, and European government bonds, according to respondents. In addition, they see a smaller bubble in European equities, Asian equities, and US non-tech equities.
The price of bitcoin has risen about 66% since the beginning of December and about 9% since the beginning of the year. Bitcoin price peaked at an all-time high of $ 41K on January 8. It has since retreated and stands at $ 32,475 at the time of writing, based on data from markets.Bitcoin.com.
A Deutsche Bank survey also compares bitcoin to Tesla stock, which has also seen huge gains in recent months. Tesla stock is up 44.5% since early December and nearly 16% since early January. Deutsche Bank strategist Jim Reid, along with research analysts Karthik Nagalingam and Henry Allen, explained:
When asked specifically about the 12-month fate of bitcoin and Tesla – a stock emblem of a potential technology bubble – the majority of readers think they are more likely to halve than double from these levels with Tesla being more vulnerable in according to readers.
When comparing Tesla stock with bitcoin, however, more respondents believe bitcoin is more likely to double than Tesla and less likely to halve.
A Deutsche Bank survey also asked respondents about the Federal Reserve tapering its asset purchase program as a potential factor that will pop the bubble. “71% of respondents do not think the Fed will taper before the end of the year, which is what the Fed governors had been saying forcefully by the end of last week,” analysts conveyed Deutsche Bank. They noted that “a quarter of readers might think economic growth / markets might force their hand.”
What do you think of Deutsche Bank’s findings? Let us know in the comments section below.
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