By
Steve Muchoki
April 19th, 2024
Of the total number of participants, 43% agreed that long Bitcoin is currently the most crowded trade. Further, 75% of participants believe that Bitcoin is a bubble. Just less than 15% of fund managers say that BTC will outperform the market in 2021.
Recently, the Bank of America Corp (NYSE: BAC), or BofA, has published the results of its Fund Manager Survey for May. It turned out that “long Bitcoin” has again become the most “crowded” trade in financial markets. Last time, that happened in January. But after that, long Bitcoin was the second-most crowded trade, it followed so-called “long tech”.
The BofA’s monthly report canvasses the views of approximately 200 institutional, mutual, and hedge fund managers globally. The latest survey was conducted between May 7 and May 13 and enrolled 216 fund managers with $625 billion in total assets under management (AUM). According to the researchers, 194 participants with $592 billion in AUM responded to the Global FMS questions. meanwhile, 78 participants with $133 billion in AUM responded to the Regional FMS questions. Of the total number of participants, 43% agreed that long Bitcoin is currently the most crowded trade. Further, 75% of participants believe that Bitcoin is a bubble. Just less than 15% of fund managers say that BTC will outperform the market in 2021, which is down from 15% who said so in the April survey.
In addition, 69% of respondents are expecting both above-trend growth and inflation on markets. Notably, inflation is considered to be a major risk by 35% of participants. Profit expectations plunged by 6%, however, 78% still say global profits will improve over the next 12 months. Expectations for the first interest-rate hike from the Federal Reserve shifted to November 2022 from January 2023.
Bitcoin’s Recent Performance
At present, Bitcoin is showing weakness, as its dominance is slackening, with price and market cap plunging. According to CoinMarketCap, its market dominance is now 40.13%, a dip from a high of 69.71% back in January when the bull run was just picking momentum. As for the exact market capitalization, Bitcoin has tanked from over $1 trillion a few weeks ago to $756,951,715,366.
The price of Bitcoin is also falling. On Monday, May 17, there was a bloodbath at Satoshi Street with Bitcoin price crashing over 10% slipping under $42,500 levels. The drop caused a massive sell-off, resulting in big losses of short-term Bitcoin holders. At press time, BTC is trading at $40,241.85.
By the way, analysts agree that it is not the bottom yet. However, this prognosis does not demotivate some companies from investing in BTC. For instance, recently, we reported about MicroStrategy Incorporated (NASDAQ: MSTR) buying additional 229 units of Bitcoin for a sum of $10 million. The purchase followed its previous acquisition of 271 units of Bitcoin at an average price of $55,387. As the company has stated, it has always maintained a positive stance when it comes to Bitcoin. According to MicroStrategy, Bitcoin is superior to all the cryptos both as a store of value and a hedge against inflation.