While Bitcoin prices jumped to a fresh high of above $64,000 on Wednesday as Coinbase’s direct listing on Nasdaq fuelled investors’ interest in the cryptocurrency, a majority of fund managers believed Bitcoin to be simply a bubble. That’s at least according to the April 2021 Global Fund Manager Survey by Bank of America. The monthly survey, which canvasses thoughts of around 200 institutional, mutual, and hedge fund managers globally, showed that 74 per cent respondents believed Bitcoin to be a bubble while only 16 per cent disagreed with the notion. Bitcoin was trading at a little over the $63,000-mark at the time of filing this report, as per data from Coindesk.
The survey also noted that a long position on bitcoin was seen to be the second most crowded trade by 27 per cent respondents after technology stocks (31 per cent) but ahead of environmental, social and corporate governance (ESG) (17 per cent), cyclical stocks (14 per cent), and US treasuries (8 per cent). A long position is referred to buying an asset hoping its value will enhance over time. Moreover, around 10 per cent respondents expected Bitcoin to outperform other assets in 2021.
Bitcoin has quite exploded over the past 12 months with over 800 per cent jump in price from $6,718 as of April 16, 2020, amid increased interest from institutions and large investors such as Tesla, PayPal, Visa, Square, and many more. According to a recent Bloomberg study on crypto outlook for 2021, Bitcoin may even climb over sixfold up to $400,000 in 2021 similar to the bull run of 2013 and 2017. “Our graphic depicts Bitcoin on similar ground as the roughly 55x gain in 2013 and 15x in 2017. To reach price extremes akin to those years in 2021, the crypto would approach $400,000, based on the regression since the 2011 high,” the study had noted.
The total market cap of all cryptocurrencies had topped $2 trillion for the first time earlier this month with Bitcoin dominating 54.1 per cent of it at $1.09 trillion market cap, according to the data from crypto tracker CoinGecko. The $1 trillion addition to the overall market cap had occurred in three months from the $1 trillion market cap as of January 7, 2021. Currently, there are 6,704 coins with a combined market cap of almost $2.3 trillion with 50.9 per cent dominance by Bitcoin and 12.4 per cent by Bitcoin’s closest rival Ethereum.