Bitcoins may be selling like hot cakes, but global investors are wary of a bubble brewing there. The latest global fund managers survey by BofA Securities showed that 74% of fund managers think bitcoin is just a bubble.<\/p>\n
The increased adoption of cryptocurrencies by institutional investors has translated into a massive rally in this asset class.<\/p>\n
In the past one year, the price of bitcoin has risen by many folds from around $10,000 to more than $63,000 recently.<\/p>\n
Interestingly, the findings of the survey coincide with the stock market debut of Coinbase, the largest cryptocurrency exchange, on the Nasdaq.<\/p>\n
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According to the survey report, bitcoin was the second most-crowded trade after technology stocks, with 10% of the respondents expecting the former to outperform other asset classes.<\/p>\n
While bitcoins returns may be mouth-watering, the meteoric rise of cryptocurrency should be taken with a sack full of salt.<\/p>\n
Today, bitcoin and ethereum hit new all-time highs of 63,200 BTC\/USD and 2,230 ETH\/USD, respectively, bringing the crypto market into unknown territory. Positive signs from miners and likely the first publicly-traded company to pay the board of directors in bitcoin contribute heavily to this unknown territory,\" Mads Eberhardt, cryptocurrency analyst at Saxo Bank, said in his blog on 14 April.<\/p>\n
The question which should be raised in this context is what happens the day the table turns, and miners start selling their increased bitcoin position,\" he added.<\/p>\n
On the other hand, only 7% of those surveyed see the US equities in a bubble.<\/p>\n
Whereas 25% of the respondents think it is in an early-stage bull market, 66% view this current up move in US equities as a late-stage bull market.<\/p>\n
Further, the survey report pointed to a continued risk-on mode, with net overweight allocation to equities rising to close to an all-time high of 62%.<\/p>\n
The optimism surrounding equities has remained largely intact among global investors, aided by hopes of a faster global economic recovery and rising corporate profits.<\/p>\n
Around 85% of fund managers are expecting global profits to improve over the next 12 months.<\/p>\n
Besides, despite some countries struggling to contain the pandemic, covid is not among the top three risks. A mere 15% of those surveyed were worried about it.<\/p>\n
Global fund managers see the tantrum in bond markets as the biggest tail risk to their portfolios, followed by inflation and high taxes.<\/p>\n
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\nFund managers think bitcoin is in a bubble, but not equities - Mint<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"