Deutsche Bank: Bitcoin is Too Volatile to Be a ”Reliable” Store of Value
Deutsche Bank Says Bitcoin is Too Volatile to Be a ”Reliable” Store of Value
One of the world’s largest financial service providers, Deutsche Bank, has recently claimed that Bitcoin’s price fluctuations do not contribute to it as a ”reliable” store of value.
Last week Germany-based Deutsche Bank published the first part of its 3-series “The Future of Payments” report, which detailed that though cryptocurrencies have “passed the tipping point needed to become fashionable,” they are still in the “early adoption stage.”
Speaking about Bitcoin, the world’s most recognized crypto, the bank maintained that it is “too volatile” to be a “reliable” store of value. It pointed to steep price highs and lows throughout 2017-2018.
Deutsche Bank also noted that Bitcoin payments still account for a ”tiny” fraction of all payments conducted globally, although such payments see steady rise in popularity.
In general, the bank believes that cryptocurrencies have a huge potential to ”revolutionize” payments. It proceeded to say that “Looking ahead, it may not be surprising if a new and mainstream cryptocurrency were to unexpectedly emerge.”
The second part of the research, also published last week, outlined that cash will be used for ”decades to come”. The third part, titled ”Digital Currencies: the Ultimate Hard Power Tool”, published on January 27, cited Professor Milton Friedman, Nobel Prize winner:
”The one thing that’s missing but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A.”
The report further stated that this e-cash will soon be a reality, as “a new digital currency could become mainstream within the next two years.”
Last month, Deutsche Bank stated that as current fiat system looks ”fragile”, cryptocurrencies such as Bitcoin may replace it in the next decade. Additionally, it said that it is about time for crypto to become legally recognized.
