The financial institution believes that the pioneering cryptocurrency must transform its potential into results. The bank noted that the next three years should be a turning point for Bitcoin.
German bank Deutsche Bank recently released a report highlighting that Bitcoin is too important to ignore. They attribute that to the fact that the cryptocurrency has 1 trillion US dollars of capitalization. The report stated that the crypto asset is here to stay, but will maintain its volatility in the markets.
Analyst Marion Laboure conducted a research study entitled “Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?” She highlighted that the cryptocurrency must transform its potential into long-term results o maintain its value proposition.
Bitcoin’s situation is comparable to that of Tesla, Elon Musk’s electric car manufacturer, according to Laboure. The researcher thinks that Bitcoin needs to face the challenge of transforming finance. As for the car factory, she believes that it has to be disruptive in the fossil fuel-based automotive world.
According to the analyst, both Tesla and Bitcoin are changing and leading their respective segments. She predicted that the electric vehicle company and Bitcoin would continue to dominate their markets. However, she explained that both of them must maximize their potential to achieve that goal.
Laboure said that the increasing number of companies and fund managers entering the market will continue to drive the price of Bitcoin higher. She added that “the value of Bitcoin will continue to rise and fall depending on what people believe it is worth.” This is the so-called “Tinkerbell effect”, that is, something is more likely to happen if more people believe in it. That explanation is based on Peter Pan’s claim that Tinkerbell exists because children believe in her.
Global Bitcoin Adoption Would Keep Growing
Another factor why Laboure believes that no one should ignore Bitcoin is its continuous price rise. In general, banks and governments are convinced that Bitcoin and other cryptocurrencies will not reverse.
Governments would create new regulations to apply at the end of 2021 or early 2022, seeking to exert greater control. This happens because a minimum of 30% of the transactional activity of Bitcoin is related to the payment of goods and services. The rest, that is 70%, goes to financial investment, according to the researcher.
“The next two to three years should be a turning point for Bitcoin. Consensus about its future may emerge as people follow the evolution of the digital currency,” added the bank’s report. The financial institution states that Bitcoin is a digital token “with no backing or intrinsic value.”
On other occasions, Deutsche Bank has spoken positively about cryptocurrencies. For example, the institution predicted in 2019 that crypto assets will be the alternative to national fiat currencies by 2030.
Last November, the bank even assured, regarding digital currencies, that they were ready for the next “age of money”. With this, the institution proved to be aware of the strength that Bitcoin and other cryptocurrencies are gaining in the world market.
By Alexander Salazar
