- Fund managers rated Bitcoin as the third most crowded trade in a new survey conducted by the Bank of America.
- The fear of inflation has caused many investors to consider investing in hedge assets like Bitcoin and gold.
The largest cryptocurrency, Bitcoin (BTC), attracted many institutions and retail investors since this year, following the fear of inflation due to massive money printing. The Bank of America (BofA) confirmed this interest in Bitcoin via a recent Global Fund Manager Survey, which indicated that the crypto is the third “most crowded trade” around the world. The crypto ranked higher than other long-standing traditional assets.
Fund manager rank BTC as third most crowded trade
About 217 fund managers collectively holding over $530 billion assets, responded to the BofA survey conducted from December 4 to 10. When asked what was they think is the most crowded trade currently, 15 percent of the participating fund managers ranked the largest crypto as the third-largest, ranking below tech stocks and short dollar positions which had 52 percent and 18 percent, respectively.
Bitcoin outranked corporate bonds and gold as the most crowded assets. Only 11 percent of respondents rated the corporate bonds, while gold gained less than five percent. However, many respondents think that gold will perform better in the coming year. About seven percent noted that the yellow metal would outperform in 2021, while less than five percent said so for Bitcoin.
Fear of inflation is favoring Bitcoin
The rating of the short US dollar as the second-most crowded trade shows just how much investors are bearing on the currency due to inflation. The US government had printed lots of money to ease the effect of the coronavirus pandemic on the economy. However, such massive prints could result in hyperinflation in the economy, as many people speculated. This same reason caused MicroStrategy to rethink allocating their cash reserve in Bitcoin.
Since that investment, many big companies Invested in the cryptocurrency, with the recent being MassMutual, an insurance company.