Dogecoin peaks, crypto surges as concerns over market bubble grow

[LAUREN TAYLOR]

DOGECOIN — THE MEME CRYPTOCURRENCY MADE FAMOUS BY A SMILING SHIBA INU — REACHED ITS HIGHEST LEVEL SINCE 2021 ON THURSDAY. THIS RISE IS PART OF A BROADER TREND MOVING AWAY FROM TRADITIONAL FINANCE SECTORS

TAKE THE S&P 500 FOR EXAMPLE: IT HAS TIPPED RECORD HIGHS 17 TIMES THIS YEAR IN WHAT WILL LIKELY BE THE BEST FIRST-QUARTER GAIN SINCE 2019. 

IN A RECENT INTERVIEW WITH BLOOMBERG, BANK OF AMERICA’S CHIEF INVESTMENT STRATEGIST, MICHAEL HARTNETT, RAISED CONCERNS ABOUT A POTENTIAL MARKET BUBBLE. HE SPECIFICALLY POINTED OUT THE EXCEPTIONAL GAINS IN TECH STOCKS, REFERRED TO AS THE “MAGNIFICENT SEVEN,” AS INDICATIVE OF THIS BUBBLE WITHIN THE BOOMING BULL MARKET.

MARCH 14, 2024

“First of all, there is a bubble, right? You are saying there’s a bubble?

MICHAEL HARTNETT
CHIEF INVESTMENT STRATEGIST | BANK OF AMERICA

There’s characteristics of a bubble. It would make sense. In what? The Magnificent Seven? Yes. And in related stocks and, you know, you can see a little bit of it in crypto as well. I mean, this tremendous euphoria, therefore, is there because the Fed, wants to cut rates come May. You know, and the markets are front running that in gold and crypto, in equities, even in corporate bonds. But a bubble, you know, is when too much money chases too few goods and everyone wants chips and there’s a lot of money sort of chasing that. And yeah, I think it has characteristics in terms of price, the speed of the movement, the valuation, the breadth, you know, bubbles of narrow bull markets abroad and this is very broad.

[LAUREN TAYLOR]

IN TURN THE CRYPTO SECTOR, PARTICULARLY BITCOIN ETFS, HAS CAUGHT INVESTORS’ ATTENTION. THIS YEAR’S APPROVAL OF BITCOIN ETFS FUELED A SIGNIFICANT MARKET RALLY, PUSHING ITS MARKET CAP TO MORE THAN 1.4 TRILLION — AND BIG COMPANIES ARE TAKING NOTE. 

BLACKROCK AND FIDELITY HAVE SEEN SIGNIFICANT INVESTOR INTEREST IN THEIR ETFS, DRAWING NEARLY 8 BILLION DOLLARS. AND AT THE TIME OF THIS RECORDING BITCOIN IS TRADING AT 71-THOUSAND DOLLARS.