According to the latest survey of global fund managers by Bank of America, among all transactions, the volume of “long bitcoin” transactions now ranks second, second only to “long commodities.” In addition, most fund managers believe that Bitcoin is still in a bubble and agree that the Fed’s inflation is temporary.

Bitcoin is a bubble, inflation is temporary? See what the global fund managers say

Bank of America June Global Fund Manager Survey

Bank of America (BofA) this week released the results of its June survey of global fund managers. The survey was conducted from June 4 to 10, covering 224 fund managers worldwide, who currently manage a total of US$667 billion in funds.

During the research process, fund managers were asked many questions that investors care about, including:

1. Economic and market trends;

2. How much cash the portfolio manager holds;

3. Which transactions the fund manager considers to be “over-trading”.

According to feedback from fund managers, “long commodities” is now the most crowded transaction, surpassing “long Bitcoin”, which is now ranked second. The third most crowded trade is “long technology stocks”, and the four to six are: “long ESG”, “short US Treasuries” and “long euros.”

Despite the recent decline in the price of Bitcoin, among all fund managers surveyed, 81% of fund managers still believe that Bitcoin is still in a bubble. This number is a slight increase from May, when 75% of the funds were fund managers. The manager stated that Bitcoin is in a bubble zone. In fact, Bank of America itself has warned of the existence of a bubble in cryptocurrencies. The bank’s chief investment strategist stated as early as January this year that Bitcoin is the “mother of all bubbles”.

At the same time, 72% of fund managers agreed with the Fed’s statement that “inflation is temporary”. However, 23% of fund managers believe that inflation is permanent. Federal Reserve Chairman Jerome Powell has repeatedly used the term “temporary” to describe the threat of inflation to the US economy.

Bitcoin is a bubble, inflation is temporary? See what the global fund managers say

Despite this, many financial industry giants have expressed disagreement with Jerome Powell, including the famous hedge fund manager Paul Tudor Jones and JPMorgan Chase CEO Jamie Dimon. Under market pressure, inflation in the United States has reached the highest level since 2008. Although Fed Chairman Powell believes that inflation will eventually fade, he admits that it may still stay at the current level for a period of time in the near future, and that the inflation rate may further increase. Go higher.

What impact will the Fed’s latest monetary decision have on Bitcoin?

Before the Federal Reserve announced the latest monetary policy, Bitcoin’s performance seemed to be relatively neutral, with only a small amount of spot purchases. However, on June 17, Jerome Powell announced the interest rate decision (implying that it is expected to raise interest rates twice by the end of 2023), policy statement and quarterly economic forecast (SEP) and announced the Federal Reserve Maintain the benchmark interest rate in the 0-0.25% range and the US$120 billion bond purchase plan.

If as expected, such a result may not be friendly to Bitcoin’s trend, because the hawkish stance may cause the price of Bitcoin and even the broader crypto assets to be suppressed. However, from the current point of view, the performance of Bitcoin is more problematic. The current price is still between 38,000 and 40,000 US dollars, and it has only fallen by 2.4% in 24 hours, which is 39,069.98 US dollars at the time of writing. The reason for the stable market reaction is probably because the previous inflation expectations have been included in the bitcoin price. Therefore, after the Fed’s statement, market stability is a “hedging phenomenon.”

On the other hand, although the cryptocurrency market is currently under attack, there are still many innovations in terms of industry technology development, which makes the market still have many new stories, so the trend towards a good market should not end so easily . For now, Bitcoin is still struggling near the $40,000 resistance level. Whether it can break through the resistance level in the short term or explore a lower support level, let us wait and see.

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#KDA# #BTC#


Post time: Jun-17-2021