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Bitcoin is a bubble for now over 80% fund managers globally despite price pullback: Bank of America survey

Financial Express - Business News, Stock Market News

Bitcoin, cryptocurrency, Elon MuskBitcoin’s price had dropped 50 per cent from over $64,000 as of April 14, 2021, to $31,700 as of June 8.

Despite the recent price crash in Bitcoin, the majority fund managers believed the crypto to be a bubble, according to the latest Bank of America Global Fund Manager survey. The June survey, which ran June 4-June 10 and involved 224 fund managers with more than $667 billion in assets under management said, “81 per cent of investors still think Bitcoin is a bubble despite the price pullback.” This is up from 74 per cent in the April survey and 75 per cent in May. Around nine per cent disagreed with the notion of the Bitcoin bubble in June, down from 16 per cent in April.

However, the collective skepticism wasn’t echoed by everyone. Jason Deane, analyst at Quantum Economics, told Decrypt that the survey “demonstrates that a lack of understanding of what problems Bitcoin solves is still prevalent in certain sectors – it is still seen as just another asset to trade by some at this time.” The finding of the survey came amid a 50 per cent drop in Bitcoin price from over $64,000 as of April 14, 2021, to $31,700 as of June 8 before it recovered back to more than the $41,000-mark on Tuesday, as per CoinMarketCap.

Also read: Bitcoin’s biggest public holder gets $500m to buy more BTC; now looks to sell $1B in shares to buy further

On the other hand, Bitcoin has continued to attract a growing number of corporates and institutional investors to back it. MicroStrategy followed Tesla, Galaxy Digital Holdings, Voyager Digital, Square etc., have been among the top public companies owning the highest number of Bitcoins in the world, as per data from BitcoinTreasuries.org. In fact, MicroStrategy is now looking to sell as much as $1 billion in common shares to buy more Bitcoin after it closed a $500 million bond sale on Monday to purchase Bitcoins. Moreover, Tesla’s Elon Musk on Sunday had tweeted that the company will start accepting Bitcoins after it confirms there would be a reasonable use of clean energy by miners.

In terms of trades that fund managers see as most overdone, commodities replaced May’s leader, Bitcoin. “Long commodities is top with 26 per cent of FMS (fund manager survey) investors saying it is the most “crowded trade”.” Bitcoin had jumped to the top position in May after the April survey noted that a long position on Bitcoin was seen to be the second most crowded trade by 27 per cent respondents following technology stocks.

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