The Bank of America’s chief investment strategist has called bitcoin the “mother of all bubbles.” Comparing the recent uptrend in digital currencies with other bubbles, he blames the market’s speculation for the bubble.
To Report Bitcoin.com. The recent uptrend in Bitcoin has worried a number of leading financial analysts about the formation of a big bubble. One such analyst is Michael Hartnett, a senior strategist at Bank of America.
Hartent said Friday that the unusual rise in the price of bitcoin may be another case of insane speculative growth, stressing that bitcoin is the “mother of all bubbles”. The strategist believes that the strong inflation in the markets has contributed to the upward trend of bitcoin in the last two months. Hartent also noted that Bitcoin has outperformed other assets over the past few decades, experiencing a 1,000 percent price increase since the beginning of 2017.
Hartent also believes that bitcoin has performed better than previous bubbles. These bubbles include a more than 400 percent increase in the price of gold in the late 1970s, the Japanese stock market in the late 1980s, and the Thai stock market in the mid-1990s. He also compared the upward trend in bitcoin prices to the .com bubble in the mid-1990s and the sharp rise in housing prices in the mid-2000s. The strategist also noted that the percentage of returns of these markets before the fall was three-digit.
The US Bank of America strategist did not mention that the price of bitcoin will fall like other bubbles. However, he said the sharp rise in the price of digital currencies is another example of excessive speculation.
David Rosenberg, a strategist and senior economist at the Rosenberg Research Institute, is another person who has recently warned about the bitcoin bubble. He has been issuing warnings since December. He called Bitcoin and its market a “classic, herding and very crowded speculation,” meaning that bitcoin has received so much attention simply because of its herding and unpopular behavior. Nouriel Roubini, nicknamed Dr. Doom, a professor of economics at New York University, is among those who have warned about bitcoin. He made the following claim in late December:
A small group of people and a handful of whales completely manipulate the price of bitcoin. Bitcoin has no fundamental value. We are approaching the moment of bursting this exaggerated bubble.