In this photo illustration, a visual representation of the digital bitcoin (BTC) is arranged on a circuit board of a hard drive.
Yuriko Nakao | Getty Images
According to the Deutsche Bank survey released on Tuesday, investors are considered the biggest market bubbles at the moment by Bitcoin and US technology stocks.
The survey, based on responses from 627 market professionals between 13 and 15 January, found that the vast majority of investors (89%) believe that some financial markets are in bubble areas.
Of the bubbles, bitcoin and US technology stocks are at the top of the list. Bitcoin is considered a more extreme case, with half of the respondents giving the cryptocurrency at 10 on a bubble scale of 1 to 10.
US technology stocks are considered the next biggest bubble, Deutsche Bank said, with an average score of 7.9 out of 10 and 83% of respondents giving it a technology bubble rating of 7 or higher.
Investors also believe that bitcoin and electric car maker Tesla is more likely to fall than rise next year.
“On a specific question about the 12-month fate of Bitcoin and Tesla – a stock that is indicative of a potential technological bubble – a majority of readers think they are more likely to double than double these levels, with Tesla, according to readers, is more vulnerable, “Deutsche said. Bank said.
Bitcoin has been on a wild ride for the past few months. The world’s largest cryptocurrency by market value peaked at almost $ 42,000 just two weeks ago, before slipping sharply. This is more than 800% higher than in March 2020, while the crypto-currency was crater due to concerns about the coronavirus pandemic.
Bulls say the digital currency has been stimulated by growing interest from institutional buyers, as well as the perception that bitcoin is an uncorrelated safe haven like gold. Skeptics, on the other hand, say bitcoin is a speculative asset and a market bubble that is likely to burst one day.
Tesla, meanwhile, also saw a huge rise in its share price in 2020, which expanded into the new year and crowned CEO Elon Musk as the richest person in the world. The stock is more than 700% higher than where it traded 12 months ago.
And while investors think bitcoin, Tesla and other U.S. technology stocks are in bubble territory, it’s not exactly clear what could cause the bubbles.
“Easy money situations” that support bubbles are likely to remain. 71% of respondents told Deutsche Bank that they do not believe the Federal Reserve will tighten policy before the end of 2021. But a quarter of investors said that could force economic growth or markets. their hand.
More investors believe that the introduction of coronavirus vaccines does not live up to expectations (41%), than those who said it was better than expected (22%). Just over half of the respondents said they see by the end of the year that life would become normal.