Market bull Richard Bernstein warns that the rush to own bitcoin and other cryptocurrencies was becoming ‘dangerously parabolic’. The Richard Bernstein Advisors CEO and CIO believe cryptos are the biggest financial bubble ever in history. “This is just a monster one.”
Bernstein told CNBC’s Trading Nation that on one side, we have all that I would call the bubble assets – tech, innovation disruption, cryptocurrencies. “On the other side of this see-saw, you have literally everything else in the world. I think if you’re looking at 2022 into 2023, you want to be in everything else in the world side of that see-saw.”
He sees bitcoin falling as much as 90% just like the plunge of tech stocks during the 2000 bubble. “I think one wants to wait to look at the true fundamentals and look at the valuations before deciding that this is all over.”
In 2018, Bernstein had said cryptocurrencies are tradeable Playing Candy Crush, and ‘using the resulting coins to buy goods or to trade on an exchange sounds silly’. He said it is ironic that investors fear traditional equities but they do not fear cryptocurrencies. “One must remember that risk typically lies in what you’re invested in and not in what you fearfully avoid.”
The investor argued that the crypto market is currently exhibiting five characteristics, which are common to all financial bubbles, that is, ample liquidity, leverage, democratization, new issues, and high turnover in an asset. Bernstein said the bitcoin is currently in a bear market, but everyone is ignoring the assets that are actually in a bull market. “The real bull market is actually in oil but everyone is ignoring the market. There’s not a lot being said about it despite the asset being up 42%,” he pointed out.
Bernstein says oil is the most neglected bull market.