The view that Bitcoin is a hallmark of speculative excess and the foam is still going strong, even after hitting 35% last month.
Around 80% of the fund managers surveyed Bank of America Corp. called the market a bubble, up from 75% in May. The poll, which captures the opinion of 207 investors with assets of $ 645 billion, says “Long Bitcoin” is the second most trafficked trade after commodities.
The results indicate a skepticism on the part of some professional managers as to whether crypto is a viable asset class given its extreme volatility and regulatory uncertainty. Bubble fears are nothing new to cryptocurrencies, and many investors have expressed doubts about the wisdom of wading into an asset that has no fundamental foundation.
Even though prices have fallen, investment banks are still betting on the emerging asset class. Goldman Sachs Group Inc. said it plans to introduce Ethereum-linked derivatives for customers, and Cowen Inc. plans to offer “institutional grade” cryptocurrency custody services.
Prices also got a boost this week from veteran hedge fund manager Paul Tudor Jones, who reiterated his view that Bitcoin is a good inflation hedge.
“I like Bitcoin as a portfolio diversifier,” said Tudor Jones of Tudor Investment Corp. in an interview with CNBC. “Everyone asks me what should I do with my Bitcoin? The only thing I know for sure, I want 5% in gold, 5% in Bitcoin, 5% in cash, 5% in raw materials. ”
Other highlights of the survey, which took place June 4-10, include:
- 72% of investors say inflation is temporary
- 63% expect the Federal Reserve to signal a throttle in August-September
- Inflation and bond market taper tantrums for top-tail risk
- Allocation in bonds to three-year lows (net -69%), while stocks climb back to highs of 2021 (61%)
- 57% of investors say any stock market correction is likely to be less than 10% over the next six months
- Managers prefer a mix of value and tech stocks as assets with the best performance over the next four years
- Allocation to Eurozone equities increased to 41% net overweight, highest since January 2018
- Allocation to US equities remained 6% overweight
- The UK equities exposure increased to 4% overweight, its highest level since March 2014
–With the support of Michael Msika.