Fund Managers See Bitcoin Bubble, Survey Says

Latin Broker Buying Shares Online.
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A bitcoin bubble is brewing, according to 74% of respondents in Bank of America’s latest Global Fund Manager Survey.

That compares with only 7% who think stocks are in a bubble and reflects the highly speculative nature and image of the popular cryptocurrency. The survey, taken April 6 through 12 by 200 fund managers with $553 billion of assets under management, also showed that a long position on bitcoin was viewed as the second most crowded trade (27%), behind a long position on technology stocks (31%).

The survey comes as bitcoin continues to surge in value. Bitcoin climbed to an all-time intraday high of $63,707 Tuesday, a day ahead of the initial public offering of cryptocurrency exchange Coinbase, which BofA estimated last month to have a 40% share of the cryptocurrency exchange market. Earlier this year, Tesla added to the bitcoin mania by investing $1.5 billion in the cryptocurrency and then announcing it would accept bitcoin as payment for its cars.

Even so, about 10% of respondents in the BofA survey expect bitcoin to outperform other asset classes this year.

Last month, BofA said in a report that it believed “the main argument for Bitcoin is not diversification, stable returns, or inflation protection, but sheer price appreciation.”

Article Sources

  1. Coindesk. “Bitcoin Price | BTC Price Index and Live Chart — CoinDesk 20.” Accessed April 13, 2021.

  2. Coinbase. “Coinbase Announces Effectiveness of Registration Statement and Anticipated Listing Date of its…” Accessed April 13, 2021.

  3. Tesla. “Bitcoin.” Accessed April 13, 2021.