According to analysts at Deutsche Bank, Bitcoin (BTC) has a market value of $ 1 trillion, and the potential for further growth has made the cryptocurrency “so important that it cannot be ignored.”
Deutsche Bank Research, the financial research arm of global banking giant Deutsche Bank, has released a report exclusively dedicated to Bitcoin, entitled The Future of Payments: Series 2, Part III. Bitcoin: Could the Tinkerbell Effect Become a Self-Asserted Prophecy? ”
In an 18-page study, Deutsche Bank describes the main characteristics of Bitcoin and analyzes the key drivers of the historical rise in the price of a $ 1 trillion asset.
Analysts at Deutsche Bank suggested that the price of bitcoin “could continue to rise” as long as executives from real estate and business companies continue to enter the market. The company said central banks and governments now “understand that bitcoin and other cryptocurrencies are not going anywhere” and are therefore expected to begin regulating them by the end of 2021.
Despite the high valuation, the growth of Bitcoin as an asset class may be difficult due to its “limited” circulation and liquidity, warns Deutsche Bank Research. Analysts said: “The real controversy is whether a high valuation alone can be a sufficient reason to include Bitcoin in an asset class, or whether lack of liquidity is an obstacle.”
Deutsche Bank analysts concluded that Bitcoin is expected to remain “highly volatile” in the short term and predicted a turning point for Bitcoin in the next “two or three years” as an agreement could be reached on the future.