According to the most recent Bank of America Global Fund Manager Survey, “long bitcoin” is currently the second most popular trade. Furthermore, the majority of investment managers feel Bitcoin is a speculative bubble and agree with the Fed that inflation is just temporary.
Fund Managers Believe Bitcoin Is In a bubble
This week, Bank of America (BofA) revealed the results of its June Global Fund Manager Survey. The study, which took place from June 4 to 10, included 224 fund managers who handle $667 billion in assets.
The fund managers were quizzed on a variety of topics of interest to investors, including where the economy and markets are headed, how much cash they have in their portfolios, and which transactions they believe are most overdone.
Some 81% of fund managers believe bitcoin is in a bubble, even after May’s 35% price crash, according to the latest Bank of America Global Fund Manager survey.
Despite new signals of institutional interest in bitcoin from hedge funds and banks like Wells Fargo, the 224 fund managers polled are skeptical.
According to the report, 72% of fund managers believe the recent increase in inflation is only temporary. Bitcoin is frequently viewed as an inflation hedge, and many crypto analysts credit the cryptocurrency’s recent gains to concerns about rising inflation. As a result, the Bank of America survey could indicate that such concerns have subsided.
The term “transitory” has been used by Federal Reserve Chairman Jerome Powell to describe the threat of inflation to the US economy on multiple occasions. Nonetheless, a number of people, including well-known hedge fund manager Paul Tudor Jones and JPMorgan CEO Jamie Dimon, have stated that they disagree with him.
The survey also found fund managers no longer see bullish bitcoin bets as the “most crowded trade” on Wall Street. “Long commodities” ranked as the most crowded trade, displacing “long bitcoin,” which held the top spot in recent monthly surveys. While bitcoin’s price remains relatively stagnant after the May crash, the price of commodities like oil and iron ore has been climbing.
Prior “peaks” in crowded trades, technology stocks in September 2020 and September 2018, US Treasuries in March 2020, and the US dollar in January 2017 and February 2015, according to Bank of America’s newest survey have been “associated with relative tops.”
By the time fund managers called bitcoin crowded in the May survey, it had plunged 33% from an all-time high of $64,829 set in mid-April. Since then, the cryptocurrency has lost another 6%.
Related article | Have Bitcoin Investors Lost Fear With BTC Price Nearing $40,000?
Goldman Sachs Survey Revealed That CIOs Don’t Like BTC
Two roundtable discussions for chief investment officers of hedge funds were recently hosted by investment bank Goldman Sachs. According to the bank, bitcoin is their least preferred investment. The most crowded trade, according to the latest Bank of America Fund Manager Survey, was “long bitcoin.”
Timothy Moe, a strategist at Goldman Sachs, wrote:
“We held two CIO roundtable sessions earlier this week, which were attended by 25 CIOs from various long-only and hedge funds. Their most favorite is growth style but least favorite on bitcoin.”
BTC/USD slid back below $40k. Source: TradingView
BTC/USD slid back below $40k. Source: Related article | Microstrategy Files to Sell Up to $1 Billion of Its Shares to Buy Bitcoin
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