In this photo illustration, a visual representation of the digital cryptocurrency Bitcoin (BTC) is arranged on a circuit board of a hard disk.
Yuriko Nakao | Getty Images
Bitcoin and US technology stocks are seen by investors as the biggest bubbles on the market right now, according to a Deutsche Bank poll released on Tuesday.
The survey, which is based on the responses of 627 market professionals on January 13-15, found that the vast majority of investors (89%) believe that some financial markets are in bubble territory.
Of these bubbles, bitcoin and US technology stocks top the list. Bitcoin is seen as a more extreme case, with half of respondents giving the cryptocurrency a score of 10 on a 1-10 bubble scale.
US technology stocks were seen as the next biggest bubble, Deutsche Bank said, with an average score of 7.9 out of 10 and 83% of respondents giving it a technical bubble rating of 7 or higher.
Investors also believe that electric car and bitcoin maker Tesla is more likely to decline than increase next year.
“Asked specifically about the fate of the 12 months of Bitcoin and Tesla – a flagship stock for a potential technology bubble – most readers consider it more likely to halve than double these levels, with Tesla being more vulnerable according to readers, “Deutsche Bank said.
Bitcoin has been on a wild journey in recent months. The world’s largest cryptocurrency by market value gathered at an all-time high of nearly $ 42,000 just two weeks ago before suddenly slipping. It increased by more than 800% compared to the lows of March 2020, when the cryptocurrency emerged following concerns about the coronavirus pandemic.
Bulls say the digital currency has been supported by increased interest from institutional buyers, as well as the perception that bitcoin is an unrelated safe haven asset similar to gold. Skeptics, on the other hand, say that bitcoin is a speculative asset and a market bubble that will explode one day.
Meanwhile, Tesla saw a massive rise 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 shares increased by over 700% compared to the place where they were traded 12 months ago.
And while investors may believe that bitcoin, Tesla, and other US technology stocks are in bubble territory, it’s unclear what exactly could “bubble” those bubbles.
Bubble “light monetary situations” are likely to remain, with 71% of respondents telling Deutsche Bank that they do not believe the Federal Reserve will tighten policy before the end of 2021. But a quarter of investors said growth or markets could force their hand.
More investors say that the launch of coronavirus vaccines is lower than expected (41%) than those who said it was better than expected (22%). Just over half of the respondents said they saw life return to normal by the end of the year.