Investor's view: 2021 Market Bubbles
Bitcoin and U.S. tech stocks are seen by investors as the most significant market bubbles right now, according to a Deutsche Bank study released Tuesday. The survey, which is based on responses from 627 market professionals in between Jan. 13-15, discovered that the large bulk of investors (89%) believe some monetary markets remain in bubble territory. Out of those bubbles, bitcoin and U.S. tech shares are top of the list. Bitcoin is considered as a more extreme case, with half of participants offering the cryptocurrency a ranking of 10 on a 1-10 bubble scale. U.S. tech stocks were seen as the next largest bubble, Deutsche Bank said, with an average rating of 7.9 out of 10 and 83% of participants giving it a tech bubble score of 7 or greater. Financiers likewise believe that bitcoin and electric automobile producer Tesla are more likely to fall than rise over the next year. "When asked specifically about the 12 month fate of Bitcoin and Tesla-- a stock emblematic of a possible tech bubble-- a bulk of readers think that they are most likely to halve than double from these levels with Tesla more susceptible according to readers," Deutsche Bank said. Bitcoin has been on a wild trip throughout the past few months. The world's biggest cryptocurrency by market value rallied to an all-time high of nearly $42,000 simply 2 weeks ago prior to slipping greatly. It is up more than 800% from March 2020 lows, when the cryptocurrency cratered on the back of concerns about the coronavirus pandemic. Bulls state the digital coin has been buoyed by increased interest from institutional purchasers, in addition to the understanding that bitcoin is an uncorrelated safe haven asset comparable to gold. Skeptics, on the other hand, state bitcoin is a speculative possession and a market bubble likely to rupture one day. Tesla, meanwhile, also saw a huge climb in its share cost in 2020 which extended into the new year and crowned its CEO Elon Musk the world's wealthiest individual. The stock is up more than 700% from where it was trading 12 months ago. And though investors might believe bitcoin, Tesla and other U.S. tech stocks are in bubble territory, it's not clear exactly what may "pop" those bubbles. "Easy monetary scenarios" helpful of bubbles are likely to remain, with 71% of participants telling Deutsche Bank they don't think the Federal Reserve will tighten policy prior to completion of 2021. However a quarter of investors said financial development or markets could force their hand. More financiers state the rollout of coronavirus vaccines is falling short of expectations (41%) than those who said it's been much better than expected (22%). Just over half of respondents said they saw life returning to regular by the end of the year.