This bold statement has been made by Chris Iggo, the chief investment officer of Axa Investment Management. Despite admitting that those following Bitcoin would have been nothing but amazed at the recent price surge, he goes on to say that it is hard to see the digital asset as a currency, saying;
“[Money should act as] a store of value and a means of exchange…[it’s] hard to see that Bitcoin satisfies those criteria”
He believes that we are witnessing a digital bubble, and fears that our jobs might be taken by robots. He says;
“It is fair to conclude that with a market capitalisation bigger than some household-name corporations, we are witnessing a digital bubble…robots may be coming to take our jobs…Bitcoin might take people’s wealth first.”
It is possible that Bitcoin is not the only bubble though in the cryptocurrency world, saying;
“The Dow Jones jumped 4.8% in the last three days of trading in November, rising above 24,000 (with a celebratory tweet from the president) and marking a price gain of 23% so far in 2017”
He adds that when you consider the low levels of volatility that stock investors ‘have it good’ and that it would not be a big surprise if we saw a bout of profit taking.
He says that despite the excessive valuations, the economy actually remains strong. The Purchasing Managers’ Index (PMI), which surveys activity from around the world, showed that in November, the manufacturing business is solid pretty much everywhere, and that this is encouraged by reasonable demand and a strong technology cycle.
If you are tempted to bet against the market, Iggo says;
“There is a good relationship normally between global PMIs, the economic cycle, corporate earnings expectations and stock prices…so markets might not turn until the economy does.”
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