‘Long Bitcoin’ most crowded trade according to BofAML’s FMS

According to Bank of America Merrill Lynch’s Global fund managers’ survey for the month of September, ‘long Bitcoin’ is the most crowded trade. The monthly Global Fund Manager Survey by Bank of America Merrill Lynch (BofAML) is one of the most authoritative surveys in financial markets. In canvassing the views of 200 or so institutional, mutual and hedge fund managers around the world with some US$600 billion of assets under management, the report provides an overview of investor sentiment and sheds light on the key factors influencing the asset allocation decisions of money managers. Its findings, therefore, deserve close scrutiny.

The most crowded trade is a warning but is not an assurance that the correction will come immediately. For example, let’s take the case of the dollar. First warning on the long dollar as the most ‘crowded trade’ came in late 2015, after which it somewhat corrected. This year, once again the survey warned until April that the ‘long dollar’ is the most crowded trade and we know now that since April, the dollar index has corrected sharply.

This is the first time when the fund manager indicated that ‘long Bitcoin’ is the most crowded trade. Bitcoin has surged sharply this year. From $968 at the end of 2016, it recently surged to $5000 before correcting. It is currently at $4344