Hartnett points out in a recent report that the dramatic increase in bitcoin over the past two years – an increase of approximately 1,000% since early 2019 – is far greater than the gains of other assets that have had large stocks in the past few decades. .
This includes a rise in gold prices of more than 400% in the late 1970s, as well as other notable investment obsessions: Japanese equities in the late 1980s, Thailand stock market in the mid-1990s, dot-com late nineties and housing prices in the mid-2000s. All of these sectors enjoyed three-digit percentage gains before falling to the ground.
More recently, Chinese stocks, biotechs and Big Tech FAANGs have also made huge gains.
Hartnett did not predict that bitcoin prices would fall by themselves. Instead, he cited the foaming of cryptocurrency prices as another example of “increasingly speculative” investing behavior. He also warned of rising interest in IPOs and SPACs for large unicorn companies.
Hartnett isn’t the only one sounding bitcoin alarms. Given that the U.S. dollar has stabilized somewhat recently, some warn that there is no longer one of the big cases for traders to own bitcoins, as hedging against the fall of the currency.
“Bitcoin pursuers here are not protecting themselves from a falling dollar, they are simply paying double for an‘ asset ’of what they were in Thanksgiving,” JonesTrading chief market strategist Mike O’Rourke said Thursday.
Most investors set aside BofA’s warning on Friday. Bitcoin rose slightly. It has increased by more than 20% in the last five days.