Digital Assets: Bitcoin A “Bubble” – Bank Of America Fund Manager Survey
Bank of America surveyed 216 fund managers in May.
Bank of America’s survey of fund managers in May covered 216 panelists holding $625 billion in assets under management between May 7 and 13.
Key observations of the Bank of America survey:
- Most crowded trade – “long bitcoin” (43%) followed by going long on technology, long ESG, and short US treasuries (Business Standard)
- 75% of respondents said bitcoin was in bubble territory
- 29% said the S&P 500 will outperform other assets in 2021
- 25% felt oil will be at the top spot in the year
- 20% suggested emerging markets will take the lead as an asset class
- The biggest risk is inflation – 35%; taper tantrum 27%; asset bubbles 15%
- Only 9% think COVID-19 is the biggest tail risk
- Value stocks will outperform growth in the coming 12 months – 48%
- The global economy will get a lot stronger – 48%
- Commodity optimism still at all-time highs – allocation in portfolios is 27% average
However, bitcoin is under pressure
Bitcoin is currently trading at $42,935, well below its all-time high of over $63,000 touched on April 16. That’s nearly 31% off – has the Bank of America bitcoin “bubble” already burst?
Many bitcoin investors lay the blame for recent price damage at the door of Elon Musk. Last week, Musk suddenly did a volte-face and announced that Tesla (NASDAQ: TSLA) would no longer accept bitcoins as payment for its cars. His reason: The energy consumed in its mining could be damaging to the environment.
However, many analysts are already humming a bearish tune. Cornerstone Macro’s Carter Worth, also known as the “Chartmaster,” thinks bitcoin is ready for a 55% plunge from its high – that puts its price at a potential $29,000.
Delta Exchange’s CEO Pankaj Balani thinks bearish moves are not finding takers at lower levels.
“Most traders are convinced of a further downside and are looking at 35,000-38,000 levels on BTC. The 200 DMA at ~38,000 should act as strong support for bitcoin,” he added.
Related Story: Musk To Bitcoin – It’s Not Me, It’s You
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