The massive gains for bitcoin this year are not your father’s bubble — it is far more dramatic — Bank of America Merrill Lynch said on Tuesday.
Bitcoin, the crypto currency, has gone from the $200 per coin range in 2015 to narrowly shy of $5,000 at present, a meteoric rise that makes the infamous dot com bubble at the turn of the 21st Century and its ensuing implosion look pretty tame (see chart above).
The currency is not alone; exchange-traded funds that let investors bet that volatility will fall have posted eye-popping returns over the past years (think 700 per cent) as well.
“Asset bubbles seem to be becoming more ‘bubbly’ as time goes by,” BofA Merrill said. “What we mean by this is that post the financial-crisis, the largesse of central banks appears to be inducing quicker and steeper price gains in assets compared to the case historically.”