Markets and Prices

Bitcoin Near ‘Extreme Bubble’ but Tesla More Vulnerable: Deutsche Bank Survey

22/01/2021 by Idelto Editor

Deutsche Bank has conducted a survey about financial bubbles. Eighty-nine percent of respondents see some bubbles in financial markets, with bitcoin near the “extreme bubble” territory. However, more respondents expect the cryptocurrency to double than they do Tesla’s stock.

Deutsche Bank’s Bubble Survey

A survey published Tuesday by Deutsche Bank asked 627 market professionals to rate on a scale of zero to 10 how they see financial bubbles in a range of assets. According to CNBC, the survey was conducted between Jan. 13 and Jan. 15. The bank found that 89% of survey respondents currently see some bubbles in financial markets.

Bitcoin is the closest to the “extreme bubble” territory, followed by U.S. tech equities, and European government bonds, according to the respondents. In addition, they see less of a bubble in European equities, Asian equities, and non-tech U.S. equities.

The price of bitcoin has risen about 66% since the beginning of December and about 9% since the beginning of the year. Bitcoin’s price reached an all-time high above $41K on Jan. 8. It has since retreated and stands at $32,475 at the time of writing, based on data by markets.Bitcoin.com.

The Deutsche Bank survey also compares bitcoin to Tesla’s stock, which has also seen huge gains over the recent months. Tesla’s stock is up 44.5% since the beginning of December and almost 16% since the beginning of January. Deutsche Bank strategist Jim Reid, along with research analysts Karthik Nagalingam and Henry Allen, explained:

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.

When comparing Tesla’s stock to bitcoin, however, more respondents believe that bitcoin is more likely to double than Tesla and less likely to halve.

The Deutsche Bank survey also asked respondents about the Federal Reserve tapering its asset purchasing program as a potential factor that will pop the bubble. “71% of respondents do not believe that the Fed will taper before year-end, which is in line with what Fed governors had been saying forcefully by the end of last week,” the Deutsche Bank analysts conveyed. They noted that “a quarter of readers may think that economic growth/markets could force their hand.”

What do you think about Deutsche Bank’s findings? Let us know in the comments section below.

Buying the Dip: Multibillion-Dollar Microstrategy Invests $10 Million More in Bitcoin

22/01/2021 by Idelto Editor

Nasdaq-listed multibillion-dollar company Microstrategy has purchased more bitcoins. With the latest buy of the cryptocurrency worth $10 million, the company now holds 70,784 bitcoins in its treasury.

Microstrategy’s Bitcoin Holdings Rise to 70,784

The Nasdaq-listed Microstrategy (NASDAQ: MSTR), with over $5 billion in market cap, has bought 314 more bitcoins. CEO Michael Saylor announced Friday:

Microstrategy has purchased approximately 314 bitcoins for $10.0 million in cash in accordance with its Treasury Reserve Policy, at an average price of approximately $31,808 per bitcoin. We now hold approximately 70,784 bitcoins.

At the time of writing, the price of bitcoin on markets.Bitcoin.com stands at 32,223 per BTC. It has fallen about 22% from an all-time high of above $41K on Jan. 8 but has risen about 70% since the beginning of December.

Saylor has been one of bitcoin’s most bullish proponents in the institutional space. He believes that “Regulatory clarity will accelerate the adoption of bitcoin by corporations and institutional investors,” the CEO said this week. He revealed in October last year that he personally owns 17,732 BTC.

Microstrategy began stockpiling BTC in August last year when it made bitcoin the company’s primary reserve asset. In December, the company purchased 29,646 bitcoins for $650 million at an average price of $21,925 per bitcoin. Its aggressive bitcoin purchase strategy has caused a Citigroup analyst to downgrade the company’s stock to a sell rating.

What do you think about all the bitcoins Microstrategy is buying? Let us know in the comments section below.

Crypto Economy Shaves $100 Billion, Digital Asset Markets Recover Some Losses

22/01/2021 by Idelto Editor

Digital currency markets have dropped in value during the last two days as more than $100 billion was shaved off the entire crypto market valuation. Bitcoin slid to the lowest point of the year at $28,800 per unit on Thursday afternoon, and a number of other crypto-assets saw significant losses as well. Currently, as digital currency trading sessions head into the weekend, the crypto economy has regained some of the losses suffered during the last few days.

Crypto Markets Attempt to Heal

During the last 48 hours, the leading cryptocurrency in terms of market valuation has slid considerably in value. For instance, two days ago the price of bitcoin (BTC) was exchanging hands for $35,900 per coin and on Thursday afternoon (EST), the price dropped to $28,800 per unit. That’s a total loss of -19.77%, but BTC markets have rebounded since then and managed to climb right back over the $30k handle.

At the time of publication, bitcoin (BTC) is swapping at prices between $32,200 to $32,800 per coin and has a touch over a $600 billion market valuation.

On Friday there’s over $28 billion in global BTC trade volume, with tether (USDT) capturing 52% of all bitcoin trades today. BTC shed over 13% over the course of the week, but is still up 35% for the last 30 days. Over the 90-day span, BTC has gained 140% and 275% against the USD for 12 months. Following BTC’s lead is ethereum (ETH), as each ether is trading for $1,240 per unit. ETH’s market cap is currently hovering at around $140 billion during Friday morning’s (EST) trading sessions.

Behind tether’s (USDT) market valuation is polkadot (DOT) which is swapping for $17.36 per DOT. On January 22, XRP is currently trading for $0.27 per token and holds a $12 billion market capitalization. XRP is followed by cardano (ADA $0.34), litecoin (LTC $140.81), chainlink (LINK $21.37), bitcoin cash (BCH $448.74), and binance coin (BNB $40.57).

Bitcoin cash has a market valuation of around $8.1 billion and is down 12% during the last seven days. During the course of the month, BCH is up 56% and 56% for the 90-day span as well. Against the U.S. dollar over the course of the last 12 months, bitcoin cash (BCH) is up 32%.

Institutional Appetite for Bitcoin

In a note to investors, Etoro crypto analyst Simon Peters spoke about bitcoin’s (BTC) recent price movements and volatility. Peters said that lower prices could be “on the cards” but the analyst does not “believe it would last for long, [as] the cat is out of the bag with bitcoin.”

“This price movement is a perfectly natural correction, one which happens in all assets once the market has perceived them to be a little overbought,” Peters wrote. “And although the price is dropping, sitting at just over $31,000 at the time of writing, the demand for bitcoin is not.”

The Etoro crypto analyst added:

Appetite among institutional investors is still growing with the likes of investment trust Grayscale buying $600m of the crypto asset in a single day this week and Blackrock, the world’s largest asset manager, announced two of its funds will trade in bitcoin derivatives in the future.

Onchain Analyst Says Bitcoin Miners May Have Dumped

On Friday, the CEO of Cryptoquant, Ki-Young Ju detailed the recent sell-off may have been sparked by some mining pools selling. “This dump might have started from BTC miners in F2pool,” the Cryptoquant executive tweeted.

The onchain researcher also shared charts of the action which showed the Miners’ Position Index and miner to exchange inflows. “I got these bearish alerts yesterday,” Ki-Young Ju further added. “Miners’ Position Index went above 2.5, 569 people deposited BTC in a single block (10 min), [and] 78 miners deposited BTC in a single block (10 min).”

Growing FUD

No one truly knows what will happen from here in the land of crypto assets and the growing economy. During the last few weeks, lots of fear, uncertainty, and doubt (FUD) has been circulating wildly while crypto-assets like bitcoin (BTC) have been bullish.

So in 1 month we had:
✅ Mnuchin regulatory scare
✅ tether fud
✅ ledger hack
✅ Mt.Gox fud
✅ Yellen, Lagarde, Dragi scare
✅ Faketoshi nonsense
✅ scam & spam attacks
✅ bitcoin software bug bullshit

Some would say that is a bit too much coincidence. Just saying.

— PlanB (@100trillionUSD) January 22, 2021

There’s been considerable regulatory scares, uncertainty surrounding the Biden administration, negative comments from Janet Yellen and Christine Lagarde, Mt Gox discussions, environmental debates over proof-of-work, tether (USDT) controversy, and the recent Ledger customer data hack. Despite all the FUD, cryptocurrency proponents still seem very optimistic about the future of crypto assets in 2021.

Want to check out all the crypto market action with prices in real-time? Check out our crypto market aggregator at markets.Bitcoin.com.

What do you think about the recent crypto price action? Let us know what you think about this subject in the comments section below.

Multibillion Dollar Fund Manager Ruffer Sees Long Trend of Institutional Bitcoin Adoption

21/01/2021 by Idelto Editor

British investment management firm Ruffer has revealed that its bitcoin holdings now account for about 3% of its entire portfolio of approximately $29 billion. The firm believes that we are “at the foothills of a long trend of institutional adoption and financialization of bitcoin.”

A Long Trend of Institutional Bitcoin Adoption

Ruffer provided an update on the firm’s bitcoin investment this week in its Investment Manager’s Review for the period ending Dec. 31. The firm wrote:

We gained our bitcoin exposure via the Ruffer Multi Strategies Fund and two proxy equities in Microstrategy and Galaxy Digital. At the period end the combined exposure of these was just over 3%.

The firm noted that “In the short period since investing both stocks are up more than 100% and bitcoin is up 90%.”

On its website, Ruffer declared that its assets under management as of Dec. 31 was £21 billion (approximately $29 billion). A 3% allocation would mean the firm’s bitcoin holdings are now worth about £630 million ($861 million). Some media outlets reported that Ruffer’s bitcoin exposure now stands at 1 billion GBP ($1.4 billion). However, a Ruffer spokesperson confirmed to news.Bitcoin.com that the firm does not recognize that estimate.

Ruffer disclosed its bitcoin purchase of £550 million ($750 million) in November, which was initially 2.5% of the firm’s entire portfolio.

“Our rationale has been well-publicized but briefly, we have a history of using unconventional protections in our portfolio. This is another example, a small allocation to an idiosyncratic asset class which we think brings something significantly different to the portfolio,” Ruffer detailed, adding:

Due to zero interest rates the investment world is desperate for new safe-havens and uncorrelated assets. We think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialisation of bitcoin.

While acknowledging the risks associated with bitcoin, Ruffer also sees growing signs of its increased adoption, which the firm believes will have a significant impact on the price of the cryptocurrency.

“Think of bitcoin’s bad reputation as a risk premium – as we move through the process of normalization, regulation, and institutionalization, the compression of this premium can have a dramatic effect on the price,” Ruffer noted. “If we are wrong, bitcoin will return to the shadows and we will lose money – this explains why we have kept the position size small but meaningful.”

Ruffer’s chairman, Jonathan Ruffer, said last week that the firm’s announcement regarding its bitcoin exposure “produced a smattering of responses.” He explained:

Our underlying reasoning is that bitcoin is becoming a challenger to gold’s standing as the one supra-currency, the thing to own when fiat currencies are kerplunked.

The chairman explained that his firm has “done much work on assessing the danger” of investing in bitcoin, “watching it for a longish time.” His firm came to a conclusion that “it is a unique beast as an emerging store of value, blending some of the benefits of technology and gold,” emphasizing, “Yes, it is a seemingly non-sensical asset – but one that makes absolute sense for how we see the world.”

What do you think about Ruffer’s bitcoin investment strategy? Let us know in the comments section below.

Bitcoin Now the Most Crowded Trade – Labeled a ‘Bubble’ in Bank of America Survey

20/01/2021 by Idelto Editor

According to findings of a recent Bank of America (BOA) survey, buying bitcoin has now surpassed tech stocks as the most crowded trade. This new ranking means tech stocks have been relegated into second place for the first time since October 2019.

Bitcoin Bubble Ranking

Still, a majority of the interviewed fund managers believe bitcoin “to be in a bubble.” Consequently, as the Reuters report notes, a majority of these respondents predict that the value of bitcoin will halve within 12 months.

Since the start of 2021, the value of bitcoin has surged 30% from just under $29,300 to reach the all-time high (ATH) of over $41,900 on January 8. This 30% growth in value after just 8 days follows the crypto’s price rising by over 300% in 2020. However, at the time of writing, bitcoin is trading at just $34,400.

Meanwhile, another survey by Deutsche Bank finds that many investors currently see bitcoin as the number one bubble. For instance, when asked to rank bitcoin on the 1-10 bubble scale, nearly half of respondents gave the crypto-asset a 10. Tesla is the next asset to be labeled a bubble by respondents after the tech giant’s stock “soared nearly 750%.” Tesla “is seen as emblematic of highly-priced tech stocks.”

However, in sentiments similar to those expressed by respondents to the BOA survey, a majority of respondents to the Deutsche Bank study predicted that in the next twelve months, bitcoin and the Tesla stock ie “more likely to halve than double in value.”

Investor Risk Aversion

In the meantime, in other findings, the BOA study says “a record 19% of investors were currently taking on more risk than normal in their investment portfolios.” The survey also found that a “proportion of fund managers surveyed by BOA who said the global economy was in an early-cycle phase, as opposed to a recession, at its highest in 11 years.”

Furthermore, a record 92% expected higher global inflation over the next year, though Deutsche Bank’s survey also showed 71% expected the U.S. Federal Reserve to resist the temptation to start removing the stimulus that has helped markets rally.

Do you agree that bitcoin is the number one bubble ahead of tech stocks? Tell us what you think in the comments section below.