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Buying Bitcoin is being viewed as the most "crowded trade", according to the latest global fund manager survey published by BofA Securities. After Bitcoin's massive rally in recent months, it is hardly surprising that this cryptocurrency is fast regaining its lost glory. From a low of $4,000 in mid-March last year, the price of the world's first and most famous cryptocurrency has risen by nearly 900%. Currently, Bitcoin is trading at $34,750.

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"Long Bitcoin jumps to top with 36% of fund manager survey investors saying it is the most 'crowded trade' dethroning 'Long tech' for the first time since October 2019," said the survey report.

Investors who have been tracking Bitcoins in the past would recollect that a similar rally in 2017 was followed by a crash. In 2017, Bitcoin rallied from the low of around $790 to a peak of $1,9041 in December. Interestingly, in the December 2017 BofA survey, Bitcoin topped the list of most crowded trades. In 2018, it crashed by 74%.

Even now, many experts have been warning of a bubble building up in Bitcoins, especially considering the sudden spike in volatility and increasing institutional participation.

"Most cryptocurrencies are notoriously volatile and the increase in institutional participation may be making things worse. While demand would increase and volatility ease should corporations hold Bitcoin for business purposes, the opposite is true when institutions gain exposure for speculative purposes. Empirical evidence from other asset classes suggests that higher participation by institutional investors could increase volatility because of their more opportunistic investment approach," Michael Bolliger, chief investment officer, global emerging markets, UBS Switzerland AG said in a report on 14 January.

Ultimately time will tell what holds true for Bitcoin investors but those in the bullish camp see further upside. Bitcoin has the potential to reach $146,000 in the long term as it competes with gold as an asset class, according to JPMorgan Chase & Co.

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