The CEO of investment management firm Richard Bernstein Advisors warns that cryptocurrencies are the biggest financial bubble in history. He advises investors to stay away from “bubble assets,” which include cryptocurrencies.
Investment Advisor Sees Cryptos As Biggest Financial Bubble In History
Richard Bernstein, CEO of Richard Bernstein Advisors (RBA), shared his take on the direction of the crypto market and how investors should approach 2022 in an interview with CNBC on Friday.
Bernstein is also the Founder and Chief Investment Officer of RBA, an independent registered investment manager. He has over 39 years of experience on Wall Street. RBA manages the equities and asset allocation of the portfolios of several of the world’s largest brokerage firms, such as Merrill Lynch, Morgan Stanley, Ameriprise, UBS and Envestnet. The firm also manages assets on behalf of several large institutional investors.
The CEO was asked which assets investors should avoid and how they should enter in 2022. He explained that “the way to think of markets is to think of it as a swing,” adding:
On the one hand, we have everything I would call bubble assets: technology, innovations, disruptions, cryptocurrencies – this whole bunch. And on the other side of the seesaw, you literally have the rest of the world.
“Looking at 2022 to 2023, you want to be on the ‘everything else in the world’ side of that swing because that’s where the opportunity is. This is where there is a shortage of capital and when we have a shortage of capital, this is where your returns are highest, ”explained the Investment Advisor.
Regarding bubbles, Bernstein was asked where the biggest risks lie. He has answered:
I think cryptos are the biggest financial bubble in history. I think he’s just a monster.
Bernstein speculates that cryptocurrencies could drop as much as 90%, as could some tech stocks during the 2000 bubble. “Again, you have to look at history. In the tech bubble, people were saying the exact same thing when tech stocks were down 30%, 35%, 40% – except that was only halfway there. They’ve gone down by about 75%, 80%, 85%, 90%.
Richard Bernstein Advisors founder concluded, “I think you want to wait until you look at the real fundamentals and valuations before you decide that it’s all over.
What do you think of Bernstein’s advice? Let us know in the comments section below.
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