In this illustration, a representation of Bitcoin virtual currency is shown in front of a stock chart.
Given Ruvic | Reuters
With prices still rising and a large public offering hitting the market, most professional investors think bitcoin is just a bubble, according to the latest Bank of America Fund Manager Survey.
About 74% of those who responded to the closely watched market meter said they see the leading cryptocurrency as a bubble. Only 16% said no to the question, indicating the highly speculative ground they see bitcoin on.
Fund managers also rated bitcoin second on the list of the busiest trades, lagging technology stocks. The cryptocurrency was well ahead of the trend towards environmental, social and corporate governance, or ESG, cyclical stocks and versus US Treasuries.
Just over three in ten respondents cited technology as the most congested transaction, while 27% cited bitcoin.
Still, about 10% said they think bitcoin will outperform in 2021.
The results come from a survey of 200 panelists with $ 533 billion in assets under management.
The findings come just as traders are hitting bitcoin’s price, and the market is waiting for a major debut for a public listing.
Bitcoin’s price has risen nearly nine-fold in the past year amid both a speculative frenzy and wider adoption. Tesla founder Elon Musk said earlier this year that the electric carmaker would accept bitcoin for payment, and multiple Wall Street banks are making provisions for customers interested in cryptocurrencies.
At the same time, Coinbase, the largest crypto exchange, will go public on Wednesday with a direct offer on the Nasdaq board.
The company has 56 million verified users and reported $ 1.8 billion in revenue for the first quarter. The market expects the valuation to reach $ 100 billion.
The Bank of America investigation found that investors’ concerns are shifting.
While Covid-19 dominated as the biggest market anxiety, that has shifted to concerns about a bond market tantrum if the Federal Reserve cuts its asset purchases early, followed by inflation.
Some investors view bitcoin as an inflation hedge, essentially a location to store money while prices soar.
Enjoyed this article?
For exclusive stock selections, investment ideas and global live stream from CNBC
Sign up for CNBC Pro
Start your free trial now