Marion Labour, an analyst at Deutsche Bank’s research arm, said that Bitcoin may well take on the role of digital gold in the distant future. That is, the cryptocurrency will last for centuries and at the same time will not fall under the total control of governments around the world.
However, Labour also did not forget to warn investors and clients of the bank about the high volatility of BTC, which is unlikely to decrease soon. Let’s talk about what is happening in more detail.
Note that representatives of Deutsche Bank have commented on the topic of cryptocurrencies not for the first time. For example, in March 2021, they published their own rating of world currencies. Then Bitcoin got the third place on the list, and it lost to the dollar and the euro. In addition, analysts did not take into account what was happening with the Chinese yuan, so the list could be more accurate. Read more about the vision of cryptocurrency by the bank’s representatives in a separate article .
What will happen to the price of Bitcoin?
The analyst believes that most bitcoins are acquired and held for the purpose of investment and speculation, but at the same time only a relatively small part of the cryptosphere participants use BTC directly as a medium of exchange. Here is a quote from an expert in which she shares her vision of what is happening in the digital asset market. The replica is given by Cointelegraph .
Just a few large capital injections or coin sales by investors can have a significant impact on the supply / demand ratio in the cryptosphere. Bitcoin is too volatile to be a reliable store of value today. And I expect this fact is unlikely to change in the foreseeable future.
Recall that volatility means sharp changes in asset prices. Cryptocurrencies are traditionally volatile, since their value can either increase or fall at least twice without any problems – and all this within a day. This does not happen on the market of classic investment instruments by the type of gold.
And while many are unhappy with this volatility, we consider it normal given several key features of digital assets. First of all, the cryptocurrency market is very young, and the niche itself is actively developing. This explains the scale of the growth of interest in the industry and its decline. In addition, the market itself is open around the clock, that is, you can conduct transactions on it at any second. In this regard, the mood in the niche changes regularly – and this affects the courses.
According to sources, Labour expressed concern about the lack of clear regulation of cryptocurrencies, as well as their potential impact on the environment . However, BTC is unlikely to lose its status as the industry’s main asset. In Ethereum may be more options in the use of decentralized finance and the NFT , Bitcoin but still enjoys his «first mover advantage», says the analyst.
If Bitcoin is sometimes referred to as “digital gold”, then Ethereum will be “digital silver”.
The only thing that could hinder Bitcoin’s freedom is the growing attention from financial regulators. It is for this reason that one of the largest cryptocurrency exchanges FTX moved its headquarters from Hong Kong to the Bahamas the day before. FTX Trading Limited was licensed in Gibraltar and the Bahamas earlier this week to operate under the FTX Digital Markets name.
CEO of trading platform Sam Benkman-Fried in his Twitter said that now «The Bahamas is one of the best places on the regulatory infrastructure in the world cryptocurrency», according to Decrypt.
FTX CEO Sam Bankman-Freed
Recall that many countries in the Caribbean region have been actively adopting legislation for several years that would allow them to attract as many crypto companies as possible. At the end of 2020, the Bahamas passed a law on digital assets and registration of exchanges, which contributed to the country’s attractiveness in the eyes of crypto startups.
We believe that the result of the expert’s comments can be considered positive. And although the bank’s representatives predict a very volatile future for Bitcoin, that is, sharp jumps in value, they still recognize the potential of the cryptocurrency and do not doubt its further development. This means that there is most likely no point in worrying about the prospects for the adoption of digital assets around the world.
