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(Bloomberg) –
The opinion that Bitcoin is a mark of speculative excess and foam is still strong, even after falling 35% in recent months.
About 80% of fund managers surveyed by Bank of America Corp. called the market a bubble, up from 75% in May. The poll, which captures the perspective of 207 investors with $ 645 billion in assets, said long Bitcoin is the second most crowded trade after commodities.
The results indicate skepticism among some professional managers as to whether crypto is a viable asset class, given its extreme volatility and regulatory uncertainty. Bubble fears aren’t new to cryptocurrencies, and many investors have expressed doubts about the wisdom of wading into an asset that has no fundamental basis.
Even though prices have fallen, investment banks continue to embrace the emerging asset class. Goldman Sachs Group Inc. said it plans to roll out Ethereum-related derivatives to clients, and Cowen Inc. plans to offer institutional grade custodial services for cryptocurrencies.
Prices were also boosted this week by veteran hedge fund manager Paul Tudor Jones, who reiterated his view that Bitcoin is a good hedge against inflation.
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 commodities.
Other highlights of the survey, which was conducted June 4-10, include:
72% of investors say inflation is transient 63% expect Federal Reserve to signal a slowdown in August-September Inflation and bond market crisis are linked for highest risk. (61%) Any equity market correction over the next six months should be less than 10%, according to 57% of investors Managers favor a combination of value stocks and technology as top performing assets over the next four Eurozone equity allocation increased to net overweight of 41%, highest since January 2018 Allocation to US equities remained at 6% overweight Exposure to UK equities increased to 4% overweight, highest since March 2014
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