They say Bitcoin is a bubble; We will revisit that statement a few years from here on. But as of now, Bank of America seems to be of the thought that inflation is temporary and Bitcoin will soon burst. The most crowded trade, “long Bitcoin,” has also become the second most crowded trade now. And nothing seems to be positive about the same. We will also see a death cross very soon unless we have big news for Bitcoin.
Bitcoin is a bubble
Bank of America conducted a survey in May 2021 where long Bitcoin was found to be the most preferred trade. But the most recent survey conducted in June 2021, it has been found that long Bitcoin has been surpassed by long commodities. Over 224 fund managers with $667 billion AUM participated in the survey. They also reported that even long tech stocks at the 3rd position are quite near to long Bitcoin. We also have long ESG, Short US treasuries, long Euro among the list.
It is also observed that the percentage of people who thought BTC is a bubble has also increased. From 75% of managers thinking the same in May to 81% in June after the recent price crash. Even the Bank of America has also warned users about the potential risks with cryptocurrency and the fact that it is actually a bubble.
Recently even Michael Burry said that Bitcoin is a bubble and compared it to the housing collapse of 2008. He also added that bulls make money, bears make money, the only ones who lose money are pigs. They get slaughtered, and anyone thinking Bitcoin is not a bubble falls in that category.
Inflation is temporary!
After the COVID pandemic, there has been a serious inflation problem in the US. The government is printing so much money that it is obvious that Inflation rates have skyrocketed. We are hearing that Biden is planning to release more stimulus checks which will increase inflation even more. A recent federal service meeting suggests that the fed says that this inflation is temporary, and 72% of fund managers agree with the same. On the other hand, 23% think that it is permanent. If the 23% are right, we can expect that Bitcoin will continue to do well even in the future.
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Also Read: Fidelity Executive says BTC’s price ‘Bottom is in’
