Hartnett points out in a recent report that bitcoin’s dramatic rise in the past two years – an increase of about 1,000% since the start of 2019 – far outweighs gains for other assets that have seen massive stoppages in the past. several decades.
That includes a rise in the gold price of more than 400% in the late 1970s, as well as other notable investment manias: Japanese stocks in the late 1980s, the Thai stock market in the mid 1990s, dot-coms in the late 1990s, and housing. prices in the mid-2000s. Those industries all enjoyed triple digit percentage gains before crashing to Earth.
More recently, Chinese stocks, biotech companies and Big Tech’s FAANGs have also made massive gains.
Hartnett has not predicted that bitcoin prices will necessarily fall. Instead, he cited the foam in cryptocurrency prices yet another example of “increasingly speculative” investment behavior. He also warned of the increased interest in IPOs and SPACs for big unicorn startups.
Hartnett isn’t alone in ringing bitcoin alarm bells. Given that the US dollar has stabilized somewhat recently, some warn that one of the big cases of the bulls for owning bitcoin – as a hedge against currency declines – no longer exists.
“The bitcoin hunters here aren’t protecting themselves from a dollar collapse, they’re just paying twice as much for an asset as they did on Thanksgiving,” Mike O’Rourke, chief market strategist at JonesTrading, said in a report Thursday.
Investors usually shrugged on Friday from the BofA warning. Bitcoin rose slightly. It is up more than 20% in the past five days.