Bitcoin is a bubble, say 74% of Bank of America survey respondents

A illustration of digital forex Bitcoin is seen in entrance of a inventory graph on this illustration.

Dado Ruvic | Reuters

With costs nonetheless hovering and a main public providing hitting the market, {most professional} traders assume bitcoin is simply a bubble, in keeping with the newest Bank of America Fund Manager Survey.

Some 74% of those that responded to the carefully watched market gauge mentioned they see the main cryptocurrency as a bubble. Just 16% mentioned no to the query, indicating the extremely speculative floor they see bitcoin on.

Fund managers additionally rated bitcoin second on the listing of the most-crowded trades, trailing know-how shares. The cryptocurrency ranked properly forward of the pattern towards environmental, social and company governance, or ESG, cyclical shares and in opposition to U.S. Treasurys.

Just over three in 10 respondents cited tech as probably the most crowded commerce, whereas 27% mentioned bitcoin.

Still, about 10% mentioned they assume bitcoin will outperform in 2021.

The outcomes come from a survey of 200 panelists with $533 billion in property below administration.

The findings arrive simply as merchants are bidding up bitcoin’s value, and the market awaits a main debut for a public itemizing.

Bitcoin’s value is up nearly nine-fold over the past year amid each a speculative frenzy and extra widespread acceptance. Tesla founder Elon Musk earlier this yr mentioned the electrical carmaker would settle for bitcoin for cost, and a number of Wall Street banks are making provisions for patrons occupied with cryptocurrencies.

At the identical time, Coinbase, the biggest crypto trade, goes public Wednesday with a direct providing on the Nasdaq board.

The agency has 56 million verified customers and reported $1.8 billion in income for the primary quarter. The market expects valuation to run as excessive as $100 billion.

The Bank of America survey confirmed that traders’ considerations are shifting.

Whereas Covid-19 had dominated as the most important market concern, that has shifted to worries over a bond market tantrum if the Federal Reserve reduces its asset purchases early, adopted by inflation.

Some traders view bitcoin as an inflation hedge, basically as a venue to retailer cash as costs are rising.

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About the Author: Daniel