The most recent Bank of America Fund Manager Survey shows that about three out of four professional investors believe that bitcoin is a bubble. They also rated BTC second on the list of the most crowded trades. Recently, investment bank JPMorgan also warned that cryptocurrency as a sector is in a bubble.
The Bank of America Fund Manager Survey for April indicates that the majority of fund managers see bitcoin as a bubble. The survey asks 200 fund managers with $533 billion in assets under management (AUM).
Answering the question of whether bitcoin is a bubble, 74% of investors answered “yes.” Just 16% said “no” to the question and 10% said they either did not know or did not want to answer this question. In comparison, only 7% of investors think that the US equity market is in a bubble. Most of them think that the equity market is in “a late-stage bull market.”
The fund managers who responded to the survey also rated bitcoin (BTC) second on the list of the most crowded trades, with 27% said it was the most crowded trade. Technology stocks rank first in the list with only over three in 10 respondents citing tech as the most crowded trade.
Nonetheless, about 10% of fund managers still think that bitcoin will outperform in 2021.
Bank of America has been saying that bitcoin is in a bubble for months. Earlier this year, Michael Hartnett, chief investment strategist at Bank of America Securities, noted that bitcoin looks like “the mother of all bubbles.” In March, the bank’s strategist said that the only good reason for holding cryptocurrency and BTC is “sheer price appreciation.”
Recently, investment bank JPMorgan also called cryptocurrency as one of the sectors it believes is in a bubble. Despite this view, the firm has predicted that the price of bitcoin could reach $146,000 in the long term, and then the firm changed it to $130,000.
At the time of writing, Bitcoin is trading at $56,600.