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 equity and asset allocation of portfolios at several of the world’s leading broker-dealer 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 one side, we have all that I would call the bubble assets: tech, innovations, disruptions, cryptocurrencies — that whole group. And on the other side of the seesaw, you have literally everything else in 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 are. He replied:
I think cryptos are the biggest financial bubble in history. I think he’s just a monster.
Bernstein speculates that cryptocurrencies could fall as much as 90% just like some tech stocks during the 2000 bubble. “Once again one has to look at history. In the tech bubble, people said the exact same thing when tech stocks were down 30%, 35%, 40% — except that was only the halfway point. They went down about 75%, 80%, 85%, 90%.”
The founder of Richard Bernstein Advisors concluded, “I think you want to wait until you look at the real fundamentals and valuations before you decide that it’s all over.
