According to a survey conducted by Deutsche Bank from January 13-15 among 627 professional investors, most consider Bitcoin and US technology stocks to be the largest market bubbles.
The overwhelming majority of investors (89%) who participated in the survey indicated that some financial markets are in a bubble. The first place in the list is occupied by bitcoin and shares of American tech companies. Bitcoin is considered the most pronounced case: half of the respondents rate the cryptocurrency at a maximum of 10 points in terms of the degree of similarity to a bubble. US tech stocks are seen as the next largest bubble, with an average score of 7.9 out of 10. About 83% of respondents described it as an artificially inflated bubble with a score of 7 or higher.
Investors also believe that Bitcoin and Tesla shares are more likely to fall in value than rise during 2021. Most of the respondents expressed the opinion that these assets will fall in price at least twice compared to the current level.
Bitcoin has been skyrocketing over the past few months, hitting an all-time high of nearly $ 42,000 a couple of weeks ago and then plummeting for a few days. Its value is up more than 800% from the March 2020 low, when the world’s largest cryptocurrency by market value sank amid fears over the coronavirus pandemic. Meanwhile, Tesla’s stock was also soaring in 2020, which lasted until the New Year and made its CEO Elon Musk the richest man in the world. Tesla shares are up over 700% in the past 12 months.
And while investors believe Bitcoin, Tesla, and other US tech companies are in a bubble, it is not clear what exactly might cause these bubbles to burst. According to 71% of respondents, the “free state of the monetary sphere” that supports bubbles is likely to remain so.
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