Let’s See if Tech Stocks are In a Bubble
Investors see bitcoin and U.S. tech stocks as the biggest bubbles in the market, according to a Deutsche Bank study published on Tuesday..
The survey of 627 professional market participants was held from 13 to 15 January. He showed that the vast majority of investors (89%) believe that some financial markets are already in bubble territory..
Of these bubbles, Bitcoin (BTC) and US stocks are at the top of the list. Bitcoin is seen as the most radical case: half of respondents rate cryptocurrency at 10 on a bubble scale of 1-10.
US tech stocks are seen as the next largest bubble, with an average score of 7.9 out of 10. However, 83% of respondents rated the sector a tech bubble of 7 or higher..
Investors also believe Tesla’s bitcoin and EV market is more likely to fall than grow in the next year..
«When asked about the fate of Bitcoin and Tesla in 12 months – assets symbolizing a potential tech bubble – most readers think they are likely to fall in half compared to current levels and Tesla will become more vulnerable, respondents say.», – noted the bank.
Bitcoin has shown a rally over the past few months. The world’s largest cryptocurrency by market value rose to an all-time high of nearly $ 42,000 just two weeks ago and then plummeted. This was more than 800% growth from the March 2020 low, when the cryptocurrency fell amid fears over the coronavirus pandemic..
"Bulls" The digital coin is said to have been bolstered by increased interest from institutional buyers, as well as the notion that bitcoin is an uncorrelated haven asset like gold. Skeptics, on the other hand, say bitcoin is a speculative asset and the market bubble is likely to burst one day..
Meanwhile, in 2020, Tesla shares also surged in value, which continued before the new year and made her CEO Ilona mask richest man in the world. The stock is up over 700% from the level it traded at a year ago.
And while investors might think Bitcoin, Tesla, and other U.S. tech companies are in bubble territory, it’s not clear what exactly will help those bubbles. «burst».
«Soft monetary conditions», supportive bubbles are likely to remain – 71% of respondents told Deutsche Bank that they do not believe that the Federal Reserve System (FRS) will tighten its policy until the end of 2021. But a quarter of investors said economic growth or markets could force them to take this kind of action..
More investors say coronavirus vaccine introduction falls short of expectations – 41%. Those who believe that the situation has improved – only 22%. Just over half of the respondents said that by the end of the year life would be normalized.