Bitcoin has become a cause of worry for more traditional money managers than every before.
Bank of America Merrill Lynch’s December global fund manager survey that was released on Tuesday sowed that bitcoin was at the top of the list for the “most crowded trades”. This is a vector that is a measurement of the sentiment which can result in reversing of gains made for a popular investment.
Bitcoin was chosen to be the most crowded trade in the global financial world by 32 per cent of the respondents of the survey. The high soaring cryptocurrency first topped the list in September this year when 26 per cent of the respondents had chosen bitcoin. Ata the time of the last survey, the value of bitcoin had risen by 375 percent in the year and was valued at $4,600.
It was also the month when there was a crackdown on the cryptocurrency in China and the virtual coin was called a “fraud” that “won’t end well” by J.P. Morgan Chase CEO Jamie Mimon. Therefore. It was not the time that bitcoin was at the top and was going through a tough time as it had lost around $2000 for a brief period.
Last week, bitcoin had traded for a short time at over $19,000 and since September, the value of the virtual currency has roughly quadrupled. This huge rise in the rise of value of bitcoin partly happened due to the launching of its futures trading from the largest futures exchange of the world – CME, and its rival Cboe’s Futures Exchange.
The latest funds managers’ survey was conducted among 172 global fund managers who had a combined total of $480 billion of assets that manage. The survey was carried out by BofAML between December 8 and December 14. This survey is accepted to be one of the best surveys related to investors that is conducted on Wall Street.
The survey also found that 29 percent of the respondents identified the stocks of U.S. and Chinese technology giants too be another crowded trade.
Compared to a gain of 20 per cent rise in the S&P 500, there has been increases between 37 per cent and 60 per cent in the value of the “FAANG,” or Facebook, Amazon.com, Apple, Netflix and Google’s parent Alphabet. Tencent, the Chinese tech and gaming giant which is listed in Hong Kong, has seen a growth of over 110 per cent in share value while a 47 per cent growth has been seen in the share value of Chinese search engine Baidu. On the other hand, a 97 per cent hike in this share price was noted this year so far by Chinese e-commerce conglomerate Alibaba. The three Chinese IT giants have been given the name “BAT” due to their surge in value.
Noting gains of almost 40 per cent, this year, the technology stocks on the overall have been identified as the best performing ones on the S&P.
(Adapted from CNBC)