In a letter to investors Wednesday, Jeremy Grantham of investment management firm GMO shares a chart illustrating how large and how rapid the bitcoin price surge has been in the last two years compared with other historical bubbles.
“Historical analogy suggests this junior bubble, by size, may well crash and burn even before the broad market peaks,” he says.
“Having no clear fundamental value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur, makes this more than anything we can find in the history books the very essence of a bubble.”
Grantham also cites the bitcoin craze as one of the early signs that the stock market may be nearing the end of its yearslong rally, and predicts equities will see their final leg higher in the next six to 24 months.
Eulogy made by Jeremy Grantham