Bitcoin’s price has taken a hit recently, but research shows the digital currency is still immensely popular among investors.
A new Bank of America (BofA) Fund Manager Survey shows that “long bitcoin” is the most crowded trade in the world, reported Bloomberg.
The survey took place between May 7-13 and included responses from 194 fund managers who had over $590 billion in assets under their management. Other crowded trades included long tech, long ESG, short U.S, and long infrastructure.
Despite the popularity of BTC, the vast majority (75%) of managers consider the cryptocurrency to be a bubble.
Recent BofA Fund Manager Surveys
The results of the previous fund manager survivor were similar to the current one: In the April survey, 74% of investors thought that Bitcoin is a bubble. Also, 10% of respondents did not answer Yes or No to the question. In terms of popularity, the cryptocurrency came in second place among the most crowded trades.
Bitcoin has been in the top positions throughout the year. In the March BofA survey, with 24% of the vote, fund managers thought of it as the second most crowded. This time long tech took the first position with 34% of the vote. The survey also showed that over 90% of fund managers expect higher inflation in the coming 12 months.
The May survey is not the first time Bitcoin has taken the top spot. Fund managers also chose it as the most crowded trade in January this year. At the time of that survey, Bitcoin had not yet reached the all-time highs of Q1 2021. It was in February when Bitcoin reached the $50,000 mark, and then went well over it in Q2.
BofA and The Blockchain
BofA’s Chief Operations and Technology Officer Cathy Bessant recently shared her thoughts about blockchain tech at the Collision 2021 event. According to Bessant:
“I admire the beauty of blockchain distributed ledger technology…In financial services and for our company, it’s been a great technology searching for a use case.”
“Bring me a use case that makes sense in financial services and we’ll give it a try,” she added.
Bessant also shared that BofA is testing the emerging tech. According to her, BofA has fifty of its patents in the distributed ledger market. Talking more about the suitability of the new technologies for banking, she said:
“Banking’s been trying to electronify and digitize for a long, long time. We move money electronically with great safety and great unified views as to the provenance of that money for decades, really, so we’re not maybe the best use case.”
Interestingly, Bank of America Corp. has decided to use the blockchain-based Paxos system, according to Bloomberg. The system will enable the bank to settle stock trades in a matter of minutes. This is a significant improvement over the current settlement time of around two days.
Paxos is the first regulated blockchain infrastructure platform. Customers of the company include Credit Suisse, PayPal, and Societe Generale, and it has recently closed a $300 million Series D round of funding.