Hartnett points out in a recent report that the dramatic growth of bitcoin in the last two years – an increase of about 1,000% since early 2019 – is much higher than the gains for other assets that have enjoyed massive operations over the past few decades. .
This includes a 400% rise in gold prices in the late 1970s, as well as other notable investment rages: Japanese equities in the late 1980s, the Thai stock market in the mid-1990s, dot-com in the late 1990s and housing prices in the mid-2000s. All sectors enjoyed three-digit percentage gains before falling to the ground.
More recently, Chinese equities, biotechnology and Big Tech FAANGs have also made huge gains.
Hartnett did not predict that bitcoin prices would fall in themselves. Instead, he cited the foam in cryptocurrency prices as another example of “increasingly speculative” investment behavior. He also warned of increased interest in IPOs and SPACs for large unicorn startups.
Hartnett isn’t the only one ringing bitcoin alarm bells. Given that the US dollar has stabilized somewhat recently, some warn that one of the big cases of bulls holding bitcoin – as a hedge against the currency decline – no longer exists.
“Bitcoin’s followers here are not protecting themselves against a collapse of the dollar, they are simply paying twice as much for an ‘asset’ as they were on Thanksgiving,” said Mike O’Rourke, chief market strategist at JonesTrading. .
Investors dropped the BofA warning on Friday. Bitcoin has grown slightly. It has grown by more than 20% in the last five days.