In the newest part of Deutsche Bank’s research, analyst Marion Laboure claims: by now, central banks and governments have realized that crypto is here to stay. “They are expected to start regulating crypto-assets late this year or early next year,” she adds.
The title of the paper speaks for itself: “Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?” Do you recall Peter Pan’s story? For Tinkerbell fairy, the belief was a matter of life and death; she couldn’t exist unless enough kids believed in fairies. Bitcoin is not the first or last asset in human history, which doesn’t have an absolute value. One day, we’ve decided that gold is valuable, right?
However, Marion thinks that Bitcoin’s still too illiquid to serve as an asset and too volatile to be widely accepted as a means of payment. Nor will it replace fiat any time soon: central banks, she says, are more likely to develop their digital currencies.
Tom Jessop, president of Fidelity Digital Assets, is more bullish. He argues that Bitcoin’s volatility went down 50% in the last four years, while its liquidity increased by the month. According to Jessop, the crypto market is quickly maturing – and Jeff Currie, Goldman Sachs’ global head of commodities research, shares that sentiment. “I think in any nascent market, you get that volatility and those risks that are associated with it,” says Curie.
I think that we’ve read enough to know: the fairy lives. We’ve hit a tipping point, and Bitcoin’s adoption will gain more momentum as large companies integrate the coin and institutional investors enter the space. And sometime very soon, we’ll be turning a new page in the tome of finance. Or maybe, it’s the beginning of a new volume?
Which way do you think crypto adoption will go?