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In this photo illustration, a visual representation of the Bitcoin digital cryptocurrency (BTC) is laid out on a printed circuit board of a hard drive.
Yuriko Nakao | Getty Images
Investors currently view U.S. Bitcoin and tech stocks as the biggest bubbles in the market, according to a Deutsche Bank survey released on Tuesday.
The survey, based on responses from 627 market professionals between January 13 and 15, found that the vast majority of investors (89%) believe some financial markets are in bubble territory.
Out of these bubbles, bitcoin and US tech stocks are at the top of the list. Bitcoin is considered a more extreme case, with half of respondents rating cryptocurrency with a rating of 10 on a scale of 1-10 bubbles.
U.S. tech stocks were considered the second biggest bubble, Deutsche Bank said, with an average score of 7.9 out of 10 and 83% of respondents giving it a tech bubble rating of 7 or higher.
Investors also believe bitcoin and electric car maker Tesla are more likely to fall than rise over the next year.
Asked specifically about the 12-month fate of Bitcoin and Tesla – an iconic stock of a potential tech bubble – a majority of readers think they’re more likely to halve than double from those levels, with Tesla being more vulnerable according to readers, “Deutsche Told the bank.
Bitcoin has been on a wild ride over the past few months. The world’s largest cryptocurrency by market value hit an all-time high of almost $ 42,000 just two weeks ago before falling sharply. It is up more than 800% from lows in March 2020, when the cryptocurrency crashed due to concerns about the coronavirus pandemic.
The bulls say the digital coin was supported by increased interest from institutional buyers, as well as the perception that bitcoin is an uncorrelated safe-haven asset similar to gold. Skeptics, meanwhile, say bitcoin is a speculative asset and a market bubble that is likely to burst one day.
Tesla, meanwhile, also saw a massive increase in its share price in 2020, which extended into the new year and crowned its CEO Elon Musk the richest person in the world. The stock is up over 700% from where it traded 12 months ago.
And while investors may think Bitcoin, Tesla, and other US tech stocks are in bubble territory, it’s unclear exactly what could “burst” those bubbles.
Bubble-friendly ‘easy money situations’ are likely to remain, with 71% of respondents telling Deutsche Bank they don’t think the Federal Reserve will tighten policy until the end of 2021. But a quarter of investors said the economic growth or markets could force their hand.
More investors say the deployment of coronavirus vaccines is below expectations (41%) than those who said it was better than expected (22%). Just over half of respondents said they saw life return to normal by the end of the year.
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