About 80% of fund managers surveyed by Bank of America say the market is in a bubble, up from 75% in May.

The survey of 207 investors with $645 billion in assets further revealed that “long Bitcoin” is the second-most crowded trade after commodities.

This has been despite the fact that Bitcoin had a 50% drawdown last month from its all-time high of nearly $65,000 in mid-April. Following the drop to $30,000 and on some exchanges as low as $28,000 during the sell-off, BTC is back above $40,000.

Meanwhile, an increasing number of institutional investors, asset managers, and banks are adopting cryptocurrencies and offering services.

Just this week, veteran hedge fund manager Paul Tudor Jones said he likes “Bitcoin as a portfolio diversifier” and shared his plan to invest 5% of his portfolio in Bitcoin, the same percentage as gold, cash, and commodities.

Meanwhile, besides long Bitcoin, “long tech stock,” “long ESG,” “short US treasuries,” and “long Euro” are other crowded trades this month.

The survey conducted between June 4 to 10 further revealed that while allocation to bonds is at a three-year low, net -69%, stocks are back up at 2021 highs of 61%.

Allocation to U.S. equities remained at 6% overweight while allocation to Eurozone equities increased to a net 41% overweight, the highest since Jan. 2018. Meanwhile, exposure to UK stocks increased to the highest level since March 2014 and is 4% overweight.

In the next four years, managers see a mix of value and tech stocks as best-performing assets.

According to 57% of investors, any equity correction to occur in the next six months is likely to be less than 10%.

When it comes to inflation, 72% of investors say it is transitory, and 63% expect the Federal Reserve to signal tapering in August-September. Inflation and bond market taper tantrum are the top tail risk.

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