Bitcoin’s incredible rally has concerned many analysts. Those analysts have warned of a large incoming bubble. One of them is Michael Hartnett, chief strategist at Bank of America’s Securities division.
He said recently that the surge in bitcoin’s value could be another example of speculative mania, highlighting the fact that bitcoin appears like “the mother of all bubbles.” The chief strategist says he thinks extreme inflationary prices within the market aided bitcoin’s rally in the past 60 days. Hartnett reminded followers that bitcoin has out-competed other assets with its value surging 1,000% since the start of 2019.
Bitcoin “wins the title when compared to previous bubbles,” he claimed, comparing its performance to other past bubbles. Bubbles which included a takeoff in gold prices of more than 400% in the 1970s, Thailand’s stock market in the 90s and Japanese stocks in the 80s. He went on to compare bitcoin’s bubble to the dot-com bust in the 1990s and housing crash in the 2000s. Hartnett highlighted that those sectors saw triple-digit percentage increases before catapulting down.
He did not directly claim that bitcoin would go into freefall like these other bubbles. But he connected the surging prices of cryptocurrencies as another example of “very speculative” investing.
Others who have recently predicted a bitcoin bubble include the chief economist at Rosenberg Research, David Rosenberg. Who warned about a bitcoin bubble in December, saying that BTC was “a classic, follow-the-herd trade.” Another warning was issued by NYU economist, Nouriel Roubini, also known as “Dr. Doom”. Who said “the value of bitcoin is completely manipulated by whale investors.” “It does not have fundamental value. We are nearing the time when the bubble is going to burst.”