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Deutsche Bank or Deutsche Bank AG – Germany’s largest private banking group headquartered in Frankfurt am Main, founded in 1870 – have released a report saying Bitcoin is too important to be. skip …
The Deutsche Bank report published last week under the title: “Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?” Here’s the third part of “The Future of Payments: Series 2” Report author, research analyst Marion Laboure, Ph.D., wrote:
Bitcoin’s $ 1 trillion market cap makes it too important to ignore. As long as asset managers and companies continue to enter the market, the price of bitcoin is likely to continue to rise.
At the time of writing, Bitcoin is trading for $ 57,065 and the cryptocurrency’s market cap is around $ 1.064 trillion, based on data from Coinmarketcap.
The report also discusses work Bitcoin as a commodity, currency and equity. While note that “bitcoin transactions and transaction possibilities are still limited”, “their market cap is on the top 10 list, both in terms of currencies and stocks.” Comparing Bitcoin to fiat currencies, the report details:
In terms of total currencies in circulation, Bitcoin is the third largest currency in the world, after the US dollar and the euro.
“This is mainly due to the recent dramatic increase in the value of Bitcoin,” the report went on, adding:
At the beginning of 2019, Bitcoin was only 3% of all US dollars in circulation, but by February 2021, it had increased beyond 40% of all US dollars in circulation.
The fourth largest coin, according to Deutsche Bank Research, is the Japanese yen, followed by the Indian rupee.
Laboure asserted that:
Bitcoin’s value will continue to rise and fall depending on what people believe it’s worth.
“This is sometimes called the Tinkerbell Effect,” she explained. The Tinkerbell effect is an economic term, which means that the more people believe in something, the more likely it is to happen. This term is based on Peter Pan’s statement about Tinkerbell exists because children believe she exists, a development in a fairy tale called Peter Pan.
Furthermore, the Deutsche Bank analyst added that:
Central banks and governments understand that cryptocurrencies will exist, so they are expected to start regulating crypto assets later this year or early next year.
The Deutsche Bank report also notes that central banks are “also accelerating research on central bank digital currencies (CBDC) and implementing pilot programs”.
Laboure has conducted discussions on the future of Bitcoin. “In the short term,” she said, “Bitcoin will survive and its value will fluctuate.”
Over the medium to long term, the analyst believes that “there is likely to be very little room for the widespread use of cryptocurrencies.” Furthermore, she warns that in the long term, Bitcoin “will have to convert potential into results in order to maintain its value proposition,”:
In the long run, it is difficult for central banks to give up their monopoly. And as long as governments and central banks survive and rule money, there is little room for bitcoin – as a means of payment – to replace traditional currencies.
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