As per the survey, most investors feel that Bitcoin (BTC) and Tesla (TSLA) prices are likely to decline by 50%
A survey by Deutsche Bank revealed that Bitcoin and Tesla are currently in a bubble, and their prices could soon shrink. Deutsche Bank surveyed 627 market professionals in January, and most of them believe some financial markets are currently in a bubble.
Bitcoin raced to a new all-time high of $42,000 earlier this month, but most investors believe the price could soon crash. The leading cryptocurrency is seen as the most extreme bubble at the moment, with most respondents rating it a 10 on a 1—10 bubble scale.
BTC has struggled to break past the $40,000 mark in recent days and is currently trading just below the $35,000 mark. However, not all the respondents believe Bitcoin’s price will tumble soon. Over 25% of the respondents are bullish about BTC price and believe it could surpass the $70,000 level over the coming year.
The leading cryptocurrency is up by more than 800% from its March 2020 lows, when BTC sustained massive losses due to investor concerns regarding the coronavirus pandemic. The bulls believe Bitcoin is rallying due to increased interest from institutional buyers and its role as an uncorrelated safe haven asset similar to Gold. However, the sceptics believe Bitcoin remains a speculative asset, and a market bubble could erupt one day.
Tesla a bigger bubble
While 56% of respondents believe Bitcoin is in a bubble right now, an even greater percentage (62%) believe Tesla is in a bigger bubble. Most of the respondents believe TSLA is overpriced and could decline by half over the next few months.
Tesla’s stock is up more than 700% over the past year, with the massive surge helping its CEO Elon Musk to become the world’s richest person in the process. “A majority of readers think that they (BTC and TSLA) are more likely to halve than double from these levels with Tesla more vulnerable, according to readers”, Deutsche Bank said.
While the investors think Bitcoin and Tesla are in bubble territory, it isn’t clear what could cause them to crash. Most of the respondents (71%) don’t think the Federal Reserve will end its stimulus program before the end of the year. If they don’t, the stimulus program will serve as a possible catalyst for further growth in the cryptocurrency and fintech sectors.