If one wants to know how hot bitcoin is in the market, the results of a recent survey will give the answer. According to the latest monthly survey by BofA Global Research, nearly 45% of fund managers surveyed believe the most crowded trade in May was long bitcoin, a significant pickup from April’s 27%. The “most crowded trade” in April – long technology stocks – ranked second in May.
In addition, the top options in May included going long ESG, short U.S. bonds, and long infrastructure.
In addition the survey also showed that professional investors still see inflation as the biggest threat to their portfolios, despite the Fed’s repeated claims that the current price rise is temporary. Among respondents to the monthly data survey, a record 69% believe that future growth and inflation above trend levels may occur. 35% believe that inflation is the biggest “tail risk”.
The survey involved 194 fund managers with $592 billion in assets under management.
In fact, it’s not the first time Bitcoin has topped the Bank of America’s survey. As early as January of this year, long bitcoin was recognized as the “most crowded trade” in the survey. Bitcoin fell from near $42,000 to $29,400 earlier this year, but Tesla’s acceptance of bitcoin for car purchases, backed by Musk, kicked off a three-month-long rise in bitcoin that topped out at $65,000.
Earlier in September and December 2017, Bitcoin had also topped the survey, when it was in the midst of a surge phase, soaring from near $3,150 to a high above $19,700 in three months, a maximum gain of more than 500%, only to fall back to near $7,000 in less than two months. Although it rallied to $11,000 at one point in March 2018, bitcoin has not returned above $10,000 within 15 months since then, according to CoinDesk.
The recent plunge in bitcoin has shaken the cryptocurrency’s faith, and the market has cast doubt on whether bitcoin can become a truly mature and stable asset.Tallbacken Capital CEO Micheal Purves said the momentum now makes it clear that bitcoin is turning bearish, and that the next key price hurdle for bitcoin is $42,000, roughly equivalent to the the January high. Evercore ISI analyst Rich Ross, on the other hand, is relatively pessimistic, believing that the bitcoin price is destined to fall below its 200-day average, which would bring it back down to $40,000.
MicroStrategy, on the other hand, which previously used bitcoin as a reserve, is taking advantage of bitcoin’s recent decline to bottom out. According to an 8-K filing with the SEC on Tuesday, MicroStrategy’s latest purchase was about 229 bitcoins worth $10 million, with an average price of about $43,663 each. To date, MicroStrategy’s position in bitcoin has cost $2.251 billion to purchase, or about $24,450 per coin, including fees. And according to CoinDesk’s ticker data, MicroStrategy’s aforementioned bitcoin position is currently worth nearly $4 billion.
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