Stock Market Record Highs Near As Bitcoin Gears Up For Flight To $78,500 Despite Bearish Investor Sentiment
- Trade war and recession concerns has the investors bearish since the 2008 Global Financial Crisis
- Allocations to equities to lowest while jump into cash and equivalents at its biggest
- Bitcoin on its next bull cycle, with percentage of returns much less than the previous cycles but potential for a $1 trillion market cap
- The S&P 500 index is just 1 percent shy of hitting the record set on April 30 but investors aren’t feeling good about this uptrend, per a recent survey from Bank of America Merrill Lynch (BAML).
Involving 179 global managers that oversee about half a trillion dollars in assets the survey by BAML revealed that the pessimism has been actually driven by concerns over US-led trade war fears and of an impending recession.
“Fund manager survey investors have not been this bearish since the Global Financial Crisis, with pessimism driven by trade war and recession concerns” wrote Michael Hartnett, chief investment strategist at BAML.
Meanwhile, allocations to equities are at their lowest levels in history and month-over-month jump into cash and similar assets are at its biggest since August 2011. Investors are also piling into US Treasurys.
The survey came at the backdrop of Federal Reserve beginning its two-day policy meeting on Tuesday. Investors are hoping that the central bank will give signs of rate cuts in the wake of growing trade war and weakness in the US economy.
“The tactical ‘pain trade’ is higher yields and higher stocks, particularly if the Fed cuts rates on Wednesday,” wrote Hartnett.
Despite the bearish sentiments, the S&P 500 index is less than 1 percent from its April 30 closing record, Nasdaq Composite Index stands at about 2 percent from its May 3 record, and the Dow Jones Industrial Average is less than 2 percent short of its October 3rd all-time closing high.
Bitcoin Optimism Strong, Sentiments Surging Higher
If we take a look at the 2019 returns, despite the traditional market in good spirits price wise, Bitcoin beats them with a wide margin. The world’s top cryptocurrency is up 146 percent till date in 2019 in comparison to traditional assets that are surging in the range of just 1 to 22 percent.
Bitcoin $BTC: +143%
REITs $VNQ: +22%
Nasdaq 100 $QQQ: +21%
S&P 500 $SPY: +18%
Oil $USO: +16%
Small Caps $IWM: +16%
EAFE $EFA: +12%
Investment Grade $LQD: +10%
High Yield $HYG: +9%
EM $EEM: +8%
Commodities $DBC: +6%
Bonds $AGG: +5%
Gold $GLD: +5%
Cash $BIL: +1%
— Charlie Bilello (@charliebilello) June 19, 2019
Currently, BTC/USD is trading at $9,124 with 24 hours greens of 1.91 percent. According to crypto industry experts, we are our of crypto winter and on our way to yet another bull cycle that will see us leaving the last peak of $20,000 way behind us.
This bull run is expected to see about 2,390 percent returns, which are conservative in comparison to last bull cycles that gave us the returns of 318,864% and 58,474% as analyzed by Crypto trader and investor, Josh Rager.
However, we will still hit $1 trillion market cap in 2022 as we go to a potential high of $78,500.
People ask me why I trade Bitcoin
Because in the past 10 years there hasn't been any other market that comes close
ROI each Bitcoin Cycle
2011: Return of 318,864%
2014: Return of 58,474%
2017: Return of 11,960%
2022: Potential Return of 2,392% = $78,500.00 Potential High pic.twitter.com/6BaNaNkvmY
— Josh Rager 📈 (@Josh_Rager) June 19, 2019
When it comes to the overall cryptocurrency market, Binance is leading the race with about 480% returns followed by Litecoin that is up by over 320%. While Tezos, Bitcoin Cash, and EOS are up by over 150%, Cardano and Bitcoin SV are in the green by more than 100%.