Investment Strategist warns Crypto Market is in a Massive Bubble set to Burst
Jeremy Grantham, a famed investment strategist, has predicted that all markets, including the crypto market, are in a massive bubble that is set to burst. As reported by Bloomberg, the veteran investor, the market surge in crypto over the past few years points to the nearing the end of a market bubble that is poised to burst. Grantham adds that not even the Federal Reserve Bank’s intervention can remedy the situation.
Crypto is never to be trusted according to veteran investor Jeremy Grantham
According to Jeremy Grantham, like many other skeptics, the entire market from bonds, real estate, equities, and commodities, to crypto is in a bubble that is poised to burst soon. Grantham, who is the co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based asset management firm, stated this in a recently issued report.
According to the famed British broker, crypto does not elicit any bit of trust from him. The entire crypto market and all the cryptocurrencies are seeing leaves him feeling like the proverbial little boy that watched the emperor walk around naked while everyone else admired his non-existent new robe. He advises that if possible investors should avoid the crypto market altogether.
Cryptocurrencies leave me increasingly feeling like the boy watching the naked emperor passing in procession. So many significant people and institutions are admiring his incredible coat, which is so technically complicated and superior that normal people simply can’t comprehend it and must take it on trust, he said. I would not. In such situations, I have learned to prefer avoidance to trust.
He predicts that the US markets are ripe for the biggest crash that has ever been recorded. The reasons he points out for his gloomy market outlook include what he called “crazy investor behavior” that lead to the frenzied buying of memestocks, memecoins, and NFTs that lead to massive surges in their price. He also notes that the February 2021 drop in the value of speculative stocks is also evidence of this “super-bubble.”
In his judgment, nothing will save the market from crashing, not even intervention by the Federal Reserve Bank. Notably, this is not the first time he has predicted such an event. His current prediction has been met with some skepticism from other sleuths who have questioned his argument.
Crypto proponents do not think the market will crash much further
While Grantham’s doomsday market call is coming at a time when the crypto market has been in a massive selloff, many crypto market participants will dispute his analysis of a complete market meltdown. Bitcoin proponents remain bullish for the benchmark cryptocurrency due to several on-chain metrics that indicate that the market could bounce very soon.
In fact, market participants are highly optimistic that the crypto industry will see a lot more adoption, while Bitcoin will reach a price of $100,000 in 2022. In the meantime, Bitcoin is trading at around $34,600, down 9.75% in the last 24 hours. But according to technical analyst Katie Stockton of Fairlead Strategies, the price drop below $40,000 does not yet spell doom.
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