In this photographic illustration, a visual representation of the digital currency Bitcoin (BTC) is represented on a circuit board of a hard disk.
Yuriko Nakao | Getty Images
According to a Deutsche Bank poll released on Tuesday, investors consider Bitcoin and U.S. technology stocks to be the biggest bubbles on the market right now.
The survey, which is based on the responses of 627 market professionals between January 13 and 15, found that the vast majority of investors (89%) think some financial markets are in bubble territory.
Of these bubbles, bitcoin and US technology stocks are first on the list. Bitcoin is considered a more extreme case, with half of respondents giving the cryptocurrency a rating of 10 on a 1-10 bubble scale.
U.S. technology stocks were seen as the next largest bubble, Deutsche Bank said, with an average score of 7.9 out of 10 and 83% of respondents gave it a technology bubble rating of 7 or higher. .
Investors also think electric car and bitcoin maker Tesla is more likely to fall to rise over the next year.
“When asked specifically about the fate of the twelve months of Bitcoin and Tesla – an iconic stock of a potential technology bubble – most readers believe they are more likely to be halved than twice as much. levels, with Tesla more vulnerable according to readers, ”Deutsche says. Bank said.
Bitcoin has been on a wild journey for the past few months. The world’s largest cryptocurrency by market value rose to an all-time high of nearly $ 42,000 just two weeks ago before sliding sharply. It has risen more than 800% from the lows of March 2020, when the cryptocurrency emerged due to concerns about the coronavirus pandemic.
The bulletins say the digital currency has been driven by rising interest from institutional buyers, as well as by the perception that bitcoin is a safe, uncorrelated safe haven asset similar to gold. Skeptics, on the other hand, say bitcoin is a speculative asset and a market bubble that could one day explode.
Meanwhile, Tesla also experienced a massive rise in share prices in 2020, which extended into the new year and crowned its CEO, Elon Musk, the richest person in the world. Shares have risen more than 700% from where they traded 12 months ago.
And while investors may think Bitcoin, Tesla, and other U.S. tech stocks are in bubble territory, it’s not clear exactly what can “blow up” those bubbles.
The “easy monetary situations” that support the bubbles are likely to remain, with 71% of respondents telling Deutsche Bank not believing the Federal Reserve will tighten policy by the end of 2021. But a quarter of investors said economic growth or markets could force their hand.
More investors say the launch of coronavirus vaccines is below expectations (41%) than those who said it has been better than expected (22%). Just over half of respondents said they saw life return to normal by the end of the year.