Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Respondents of the Deutsche Bank survey stated that Bitcoin and the tech stocks are likely to correct over the next 12 months. They view Bitcoin and companies like Tesla in the bubble territory as both have appreciated 10x since the March 2020 lows.
Bitcoin (BTC) and the US stocks have registered unprecedented rally since the March 2020 crash. Especially, the optimism driven US tech stocks has pulled the market higher as all three indices are currently trading at an all-time high.
In the recent survey conducted by Deutsche Bank, investors think that Bitcoin and the tech stocks are in bubble territory. In a survey conducted between January 13-15, nearly 627 market professionals voted. Of this, an overwhelming majority i.e. 89% investors think that BTC and financial market valuations are overpriced.
Investors have reportedly considered Bitcoin (BTC) as an extreme case. On a bubble scale of 1-10, nearly half of the respondents gave Bitcoin a score of 10. Similarly, nearly 83% of people gave a 7 or higher rating for the tech bubble. Against the popular opinion of Bitcoin enthusiasts, investors said that BTC and Tesla Inc (NASDAQ: TSLA) are likely to fall over the next 12 months.
“When asked specifically about the 12 month fate of Bitcoin and Tesla – a stock emblematic of a potential tech bubble – a majority of readers think that they are more likely to halve than double from these levels with Tesla more vulnerable according to readers,” Deutsche Bank said.
Interestingly, Wedbush Analyst Dan Ives recently said that the best days for Tesla are yet ahead. Ives has given a price target of $950 for the TSLA stock. Surprisingly, this price target comes despite Tesla’s gloomy performance in the EU. From March 2020 lows, the TSLA stock has jumped 10x or 900% so far.
Mixed Market Opinions of Investors in Stocks and Crypto After Bitcoin Rally
Since the start of December 2020, the BTC price has literally doubled so far moving all the way up to $42,000 by January 10. However, over the last week, Bitcoin has been consolidating between $35000-$36000. Recently, Guggenheim Partners Chief Investment Officer Scott Minerd said that Bitcoin has entered a “speculative frenzy” and it’s time to make money off the table.
However, Minerd is confident with his long-term view on Bitcoin with a price target of $400,000. Last week, ECB President Christine Lagarde slammed Bitcoin calling it a “Funny business” while adding that BTC facilitates illicit activities like money laundering.
One factor that has kept the stock markets and Bitcoin investors optimistic is the quantitative easing measures taken by Fed. In the Deutsche Bank survey, 71% of respondents said that they won’t think Fed will tighten its policy before the end of 2021. On the other hand, the Biden administration has already proposed a $1.9 trillion stimulus as a COVID-19 relief package. Another one to boost the economic growth is likely coming in February.
This liquidity p[ump has raised fears of inflation among many market analysts thereby pushing institutions to hedge options like BTC. Interestingly, such massive liquidity is likely to push the stock market and Bitcoin (BTC) forward.