Investment Adviser Bernstein Sees Crypto as a ‘Monster’ Bubble – Warns Markets Could Drop 90%

Richard Bernstein (CEO of Richard Bernstein Advisors) shared his views on the direction of crypto markets and how investors should approach 2022 during a Friday interview with CNBC.

Bernstein is also the chief investment officer and founder of RBA, an independent registered investor manager. Bernstein has more than 39 years of experience working on Wall Street. RBA manages portfolio equity and asset allocation at many of the top broker-dealer companies around the globe, including Merrill Lynch, Morgan Stanley and Ameriprise, UBS and Envestnet. RBA also manages assets for large institutional investors.

When asked by the CEO what assets investors should avoid and how they should enter 2022, he replied that ‘the only way to think about the markets is to think about them as a seesaw. He said that the best way to view the markets is to see them as a “seesaw”, adding:

We have tech, innovation, disruptions, and cryptocurrencies on one side. On the other side, there is literally everything else in this world.

“Looking at 2022 and 2023, you want the ‘everything in the world’ side because that’s where there’s the opportunity. This is where capital is scarce and where returns are higher.

Bernstein was asked about bubbles and where are the greatest risks. He responded:

Cryptos are my opinion the greatest financial bubble in history. This is a huge bubble.

Bernstein suggests that cryptocurrency could plummet as high as 90%, just like tech stocks in the 2000 bubble. “One must look back at the past. People said exactly the same thing during the tech bubble when tech stocks fell 30%, 35% and 40%, but that was just the halfway point. They fell by 75%, 80% and 85% respectively.

Richard Bernstein Advisors founder concluded that one should wait to examine the fundamentals and evaluate the valuations before concluding that it is over.