Nearly 3 in 4 professional investors in Bank of America survey see bitcoin as a bubble

With prices still soaring and a major public offering hitting the market, most professional investors think bitcoin is just a bubble, according to the latest Bank of America Fund Manager Survey.

Some 74% of those who responded to the closely watched market gauge said they see the leading cryptocurrency as a bubble. Just 16% said no to the question, indicating the highly speculative ground they see bitcoin on.

Fund managers also rated bitcoin second on the list of the most-crowded trades, trailing technology stocks. The cryptocurrency ranked well ahead of the trend toward environmental, social and corporate governance, or ESG, cyclical stocks and against U.S. Treasurys.

Just over three in 10 respondents cited tech as the most crowded trade, while 27% said bitcoin.

Still, about 10% said they think bitcoin will outperform in 2021.

The results come from a survey of 200 panelists with $533 billion in assets under management.

The findings arrive just as traders are bidding up bitcoin’s price, and the market awaits a major debut for a public listing.

Bitcoin’s price is up nearly nine-fold over the past year amid both a speculative frenzy and more widespread acceptance. Tesla founder Elon Musk earlier this year said the electric carmaker would accept bitcoin for payment, and multiple Wall Street banks are making provisions for customers interested in cryptocurrencies.

At the same time, Coinbase, the largest crypto exchange, goes public Wednesday with a direct offering on the Nasdaq board.

The firm has 56 million verified users and reported $1.8 billion in revenue for the first quarter. The market expects valuation to run as high as $100 billion.

The Bank of America survey showed that investors’ concerns are shifting.

Whereas Covid-19 had dominated as the biggest market fear, that has shifted to worries over a bond market tantrum if the Federal Reserve reduces its asset purchases early, followed by inflation.

Some investors view bitcoin as an inflation hedge, essentially as a venue to store money as prices are rising.