Deutsche Bank has conducted an investigation into financial bubbles. Eighty-nine percent of respondents see bubbles in the financial markets, with bitcoin near the “extreme bubble” area. However, more respondents expect the cryptocurrency to double than Tesla’s stock.
Bubble Survey from Deutsche Bank
A survey published by Deutsche Bank on Tuesday asked 627 market professionals to rate on a scale from zero to 10 how they view financial bubbles in a range of assets. According to CNBC, the investigation was conducted between January 13 and January 15. The bank found that 89% of survey respondents currently see bubbles in the financial markets.
According to respondents, Bitcoin is closest to the ‘extreme bubble’ area, followed by US tech stocks and European government bonds. In addition, they see less of a bubble in European equities, Asian equities and non-tech US equities.
The price of bitcoin is up about 66% since the beginning of December and about 9% since the beginning of the year. Bitcoin’s price hit a record high of more than $ 41,000 on Jan. 8 and has since retreated and stands at $ 32,475 at the time of writing, based on data from markets.Bitcoin.com.
The Deutsche Bank survey also compares bitcoin to Tesla’s stock, which has also skyrocketed in recent months. Tesla stock is up 44.5% since early December and nearly 16% since early January. Deutsche Bank strategist Jim Reid, along with research analysts Karthik Nagalingam and Henry Allen, explained:
When specifically asked about the 12-month fate of bitcoin and Tesla – a stock that symbolizes a potential tech bubble – a majority of readers think they are more likely to halve than double, with Tesla being more vulnerable, according to readers.
However, when comparing Tesla’s stock to bitcoin, more respondents think bitcoin is more likely to double than Tesla and less likely to halve.
In the Deutsche Bank survey, respondents were also asked whether the Federal Reserve was phasing out its asset buying program as a possible factor that would burst the bubble. “71% of respondents do not believe the Fed will wind down before the end of the year, which is in line with what Fed governors had said firmly at the end of last week,” Deutsche Bank analysts said. They noted that “a quarter of readers think economic growth / markets can force their hand.”
What do you think of Deutsche Bank’s findings? Let us know in the comments below.
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