The mass adoption of bitcoin is only a matter of time, and as the world grapples with this fact, traditional financial institutions are gearing up for the digital coin. Marion Laboure, an analyst at Deutsche Bank, has declared once again that Bitcoin could become “the digital gold of the 21st century”, but fails to do so as a reliable store of value today and expects more volatility for the foreseeable future.
The future of bitcoin
Analyst Marion Laboure pointed out that she does not view Bitcoin as a means of payment, nor believe it has deflationary characteristics because “Bitcoin is risky: it is too volatile to be a reliable store of value today. ‘ today. And I expect it to remain ultra-volatile for the foreseeable future,” she claimed and noted three reasons for that:
“First, about two-thirds of Bitcoins are used for investments and speculation. Second, due to its limited tradability, a few additional large purchases or exits from the market can have a significant impact on the balance between supply and demand. Third, the value of Bitcoin will continue to rise and fall based on what people think it is worth. Small changes in investors’ overall perception of Bitcoin can have a big impact on its price.
However, Laboure thinks the digital coin could become a safe-haven asset and play the role of “digital gold” because “people have always sought out assets that weren’t controlled by governments,” and gold has played this role for centuries, but bitcoin’s adoption could potentially turn into “the digital gold of the 21st century.”
In a comparison between Bitcoin and Ethereum, the analyst called the former “the pioneer” due to its much larger market capitalization, but she also sees Ethereum as a possible “digital money” because of its many applications and use cases, citing decentralized finance (DeFi) and non-fungible token (NFT).
She believes that, for these same reasons, it would be unlikely for any other cryptocurrency to become stronger than Bitcoin and Ethereum in the next 5 years.
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Laboure pointed out that there is now a trend for sites to accept a wide variety of forms of payment, and an increasing number of stores are starting to accept cryptocurrencies, but Bitcoin and Ethereum are not yet a form of payment. current.
The analyst added that “although the latest developments will enable faster and cheaper transactions, most transactions using Bitcoin take about ten minutes to clear. And it’s expensive: transaction fees have been median d around 20 US dollars in 2021.”
Now, that last part seems like a weird allegation. You wouldn’t think of Laboure as someone unfamiliar with the Bitcoin Lightning Network (the layer two payment solution that allows off-chain transactions, resulting in more speed and low fees of 1 satoshi or pennies ), given that she was named one of the eleven cryptocurrency masterminds by Business Insider and she is a recognized fintech expert.
In fact, Laboure mentioned the Lightning Network in a recent maintenance published on December 14, 2021, where she noted that El Salvador uses the network “so the fees are quite low” and said that we are considering making bitcoin a means of payment.
The problem with cryptography
Laboure added that “the main problem with cryptocurrencies is the lack of regulation”, which prevents many investors and companies from approaching the market, but she said more coherently that regulations will arrive in 2022.
“In terms of regulatory measures, we expect 2021 to be a game-changer and by 2022 many economies will have a robust regulatory framework in place for crypto assets.”
In terms of CBDC, the analyst believes that “CBDC, cash and cryptos will co-exist”.
“Cash will certainly not disappear, but we expect it to decrease as a means of payment. Most G20 countries are considering imposing stricter regulations on private cryptocurrencies. Over the past three years, central banks and governments around the world have multiplied and accelerated digital cash initiatives.
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