Friday, June 2, 2023

Bitcoin leaves behind ‘long tech’ as most crowded trade

Bank of America’s monthly fund manager survey showed a long place on bitcoin overtook “long tech”.

In a related Deutsche Bank survey, investors claimed that bitcoin was in a bubble, with 56 percent of participants stating that in the next 12 months, the cryptocurrency was more likely to halve in value.

A long place in technology companies was knocked off the top spot for the first time since October, as investors said long bitcoin was the most crowded exchange. A brief U.S. dollar place was seen as the third most crowded.

Earlier this month, Bitcoin reached $40,000, rallying more than 900 per cent since a low in March. For the first time on Jan. 2, it topped $30,000, having breached $20,000 on Dec. 16.

A record 83 percent of BofA investors anticipated a steeper yield curve-that is more than after the 2008 collapse of Lehman Brothers, the 2013 U.S. “Taper Tantrum” of the Federal Reserve or after the U.S. election in 2016.

The outlook for higher bond returns was at or near all-time highs.

A record 92 percent of BofA surveyed investors predicted higher inflation over the next year.

Investors were optimistic about the prospects for global growth: the percentage of fund managers surveyed by BofA who said the global economy is in an early-cycle period was at its highest in 11 years, as compared to a recession.

A record 19 percent of surveyed investors said they are taking more risk than average at present. In total, the fund managers surveyed by BofA handle funds more than $500 billion.

It was believed that the top tail risks to the economy were issues with the rollout of vaccinations (30%), the Fed relaxing its asset purchases (29%), and a Wall Street bubble (18 percent).

Underowned UK equities elsewhere saw some capital pouring in. But it remained pinned at 15 per cent underweight as the number one underweight area, BofA said.

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