Bitcoin (CRYPTO:BTC) prices were up 10.5% over the past 24 hours on Monday morning to above $48,000, but they remain well below their all-time high of $58,313.
Bitcoin prices are now up 475% in the past year, and a new survey by DataTrek Research suggests investors think 2021 could be a sequel to 2018.
Where Are The Bubbles? DataTrek recently asked 394 investors where they currently see pricing bubbles in financial markets. Bitcoin was by far the most popular response at 71.8%. U.S. large-cap stocks and ETFs such as the SPDR S&P 500 ETF Trust (NYSE: SPY) were a distant second at just 24.3% followed by U.S. small-cap stocks and funds like the iShares Russell 2000 ETF (NYSE: IWM) at 16.2%.
When asked if the Federal Reserve is responsible for inflating bubbles in Bitcoin and other assets, 71% of respondents answered “yes.” Of those surveyed, 60% said the exploding popularity of special acquisition companies (SPACs) has also fueled a bubble in large parts of the U.S. equity market.
DataTrek Co-Founder Nicholas Colas said he was surprised at how few investors see the SPAC frenzy as a bubble contributor.
“If we had asked a follow-on question about ‘is the larger bubble you’re thinking about in EVs/AVs and other disruptive tech stocks?’ the overwhelming answer would very likely have been ‘Yes,’” Colas said.
Flight To Safety Trade: The good news is that investors apparently don’t see the potential bubbles in Bitcoin and tech stocks posing the same type of systemic risk that the bubble in the mortgage market did back in 2008. Only 29% said current asset bubbles pose either a “great deal” or “a lot” of systemic risk, while 30% said they pose either “a little” or “none.”
DataTrek asked investors if they knew U.S. stocks were in a bubble that would burst within one month, which asset they would buy instead of stocks. Cash was the most preferred flight-to-safety option at 52% followed by 10-year U.S. Treasury bonds at 21% and gold at 16%. Only 5% of respondents preferred Bitcoin as their flight-to-safety play.
When DataTrek asked how overvalued or undervalued U.S. big tech stocks are today, 55% of respondents said they're overvalued by between 20% and 50%, while just 16% of respondents said they're overvalued by more than 50%.
“Even though these results may appear benign, some 71 percent of respondents think Tech is at least 25 percent overvalued,” Colas said.
Benzinga’s Take: Bitcoin has been a spectacular speculative investment at just about any point since the price crashed more than 70% back in 2018. However, the survey results suggest many inventors still remember the previous rise and fall of Bitcoin prices back in 2017 and 2018, and they may not be so eager to rush into the cryptocurrency as a store of value in 2021.
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