According to a new survey unveiled by Bank of America, fund managers still do not trust bitcoin and see it as a major bubble despite the massive price bust that has occurred over the past month.
Bank of America Survey Doesn’t Paint BTC in a Positive Light
Bitcoin was initially trading at an all-time high in mid-April of this year. The world’s number one digital currency shot up to approximately $64,000 per unit, reaching its highest peak in its 12-year history, though at press time, the currency has suffered somewhat and is now trading at around $40,000 even. This is something of a surge in that bitcoin was trading in the mid to high $30,000 range for the longest time throughout the month of May.
Still, many participants of the Bank of America survey are not convinced that bitcoin is anything other than a big, fat bubble, and that the currency as it is presently priced is still not justified. The fact is that bitcoin, while popular, still has many naysayers, and incidents like these are proof that bitcoin is never going to please everyone.
According to the survey, approximately 81 percent of the hedge fund managers that took part believe that bitcoin is a bubble. The survey consisted of more than 660 participants, and altogether, they manage more than $660 billion in total assets for their clients.
This is not the first time Bank of America has targeted the world’s primary cryptocurrency by market cap in some way. In a statement last March, the financial giant made the bold claim that there was literally no good reason to have bitcoin in one’s financial portfolio. Just a few days later, the institution said that its alleged energy use for mining purposes was wasteful and doing heavy damage to the environment.
Institutions Don’t Care for BTC Lately
Nikolaos Panigirtzoglou – a financial strategist for JP Morgan – recently claimed in an interview that the recent crash has also done heavy damage to bitcoin’s reputation and that institutions are not as crazy about the asset as they once were. As a result, he is rather confident that bitcoin is going to remain in the lower register for some time. He says:
There is little doubt that the boom-and-bust dynamics of the past weeks represent a setback to the institutional adoption of crypto markets and particularly of bitcoin and Ethereum. We note that the mere rise in volatility, especially relative to gold, is an impediment to further institutional adoption as it reduces the attractiveness of digital gold vs. traditional gold in institutional portfolios.
Thus far, gold is making its way up the monetary scale as several financial firms – including Societe Generale – claim that the precious metal is likely to take people’s portfolios much further than digital gold will in the coming months.