Bitcoin’s price has gone through many ups and downs this year. However, after the rapid collapse in March and the worldwide panic around the coronavirus pandemic, BTC was not removed from the list of popular tools for investors, on the contrary.
Recently, the cryptocurrency has tested its all-time high and has become even more popular – and among bankers as well. This is evidenced by the latest publication of representatives of the well-known bank Wells Fargo. It talks about how important it is to pay attention to Bitcoin now, since this innovation in the field of finance is not going anywhere.
What will happen to Bitcoin
Recall that Wells Fargo is the fourth largest bank in the world in terms of capitalization of funds in circulation. Now its representatives are optimistic about the crypt. This is still not an advice to invest in Bitcoin, but at least some of the positive is already encouraging. Here is a quote in which representatives of a financial institution share their opinion on cryptocurrency. The cue is from Decrypt.
Over the past twelve years, their cryptocurrency market capitalization has grown from literally zero to $ 560 billion. Temporary phenomena usually do not last for a full twelve years.
Bitcoin has been and remains the main asset of the cryptosphere. The most stable investments in the industry can be obtained only by investing in BTC
The report begins by mentioning a huge increase in the price of Bitcoin in 2020 – more than 170 percent. However, the enthusiasm then subsides slightly as experts point to the volatility of the price of a digital asset over the past few years. Bank analysts continue.
If you are feeling deprived of profit, you are not. Bitcoin has indeed outperformed gold and the S&P 500 in profitability over the past three years, but look at the volatility that BTC investors have had to endure. Just two months ago, the three-year total returns for all three assets were roughly the same, but their price fluctuations were different. Investing in cryptocurrency today is a bit like life in the early days of the gold rush of the 1850s, when there was more speculation than investment.
That is, analysts are unhappy with sharp jumps in the rate of the first cryptocurrency. Recall that this property is a feature of the coin, which can be explained by its independence. Still, the emission and cost of BTC cannot be influenced by central banks and governments, so what happens to the exchange rate determines the open market. So you can take it easy on the fluctuations in the value of an asset, because otherwise we would get a completely different type of project.
In the chart below, you can see that Bitcoin, gold and the S&P 500 have had little difference in profitability over three years. However, the price of BTC suddenly jumps a lot higher at the very end, which means a huge increase in profitability over the past month and a half.
Ultimately, Wells Fargo is optimistic about cryptocurrency predictions for the future. The bank is confident that “one day cryptocurrencies can become worthy investments.” In addition, the bank expects that in 2021 it will pay more attention to the crypto space and provide more opportunities for potential investors.
It is important to note that some banks have already started getting involved with coins. In particular, the German private bank Hauck & Aufhäuser announced the launch of its own cryptocurrency fund, which will open access to the crypto world for large investors. Read more about the news in a separate article.
The comments of the bank’s representatives instill optimism in the prospects for the blockchain asset niche. And it’s not even the position of Wells Fargo itself among other financial institutions, but a gradual change in the reputation of cryptocurrencies. Previously, bank representatives openly called BTC and other cryptocurrencies a scam. Just what are the statements of the head of JP Morgan Jamie Dimon, who promised to fire every crypto investor among his subordinates.
Now analysts are even hinting that cryptocurrencies will soon be considered a full-fledged investment. And this confirms the version that the niche of the blockchain and money on it is only at the beginning of its development.