- Globally, around 74% of fund managers believe Bitcoin is nothing but a bubble.
- With just 7% viewing the rise of U.S. equities as a bubble, 85% expect the global profits to improve over the next 12 months.
- Fund managers do not perceive COVID as even the top-3 risks to their portfolios.
Bitcoins have been a hot and trending topic for a significantly long time. With its price rising tremendously from close to $10,000 to exceeding $63,000 in just the last year, the sale has been mindblowing. But the tables seem to be turning. Bitcoin’s bullish rise has left the global investors sceptical of its growth potential, afraid it’s just a bubble.
Bitcoin: a Bubble?
The latest global fund managers’ survey by the Bank of America (BofA) Securities reveals around 74% of fund managers believe Bitcoin hype is nothing but a bubble. Cryptocurrency’s increased institutional adoption has originated a massive rally in this asset class. Moreover, BofA’s survey findings coincide with the Nasdaq stock market debut of Coinbase, the largest cryptocurrency exchange platform.
Is the Future Secure Enough?
The survey revealed that bitcoin is the second most-crowded trade after technology stocks. Yet just 10% of the respondents believe it’ll outperform other asset classes. And even with Bitcoin’s beyond expectation results, cryptocurrency’s meteoric rise doesn’t sit well with the system.
On April 14, Mads Eberhardt, a cryptocurrency analyst at Saxo Bank, praised Bitcoin (BTC) and Ethereum (ETH) for reaching their highs of $63,200 and $2,230, respectively. He raised the question that everyone is curious about but doesn’t pay enough heed to care, “What happens the day the table turns, and miners start selling their increased bitcoin position,”. This question further disrupted the worried minds.
Equities: Risky yet Faithful
On the contrary, when questioned about the U.S. equities’ upward movement, only 7% called it a bubble. Of all surveyed, 25% equate it to an early-stage bull market and 66% to a late-stage bull market. However, the report also hinted at a higher-than-normal risk mode, with global equities allocation approaching their all-time high of 62%.
Global investors have expressed their confidence over equities to achieve a faster global economic recovery and rise in corporate profits. 85% of the respondents expect the global profits to improve over the next 12 months.
COVID isn’t the Biggest Threat
Despite the pandemic seeming a significant cause of the market’s disturbed stance, the survey reports COVID isn’t in the top three risk factors; just 15% of those surveyed were worried about it. The global fund managers see the most considerable risk to their portfolios as “tantrum” in the bond markets, followed by inflation and high taxes, respectively.
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