A report by the major investment bank Of Germany, Deutsche Bank, has been making headlines in cryptoverse. French Analyst and Economist Marion Laboure, who is associated with the Deutsche Bank, has published an inciting report about Bitcoin. In her report, she has addressed Bitcoin as a major influence on the financial markets. She further added that it is impossible to ignore the flagship cryptocurrency as it has already crossed the $1 trillion market cap threshold.
After the passing of this metaphorical Rubicon, Bitcoin has been getting attention from major investment ventures globally. Laboure further added in her report that central banks around the globe have now come to terms with the fact that Bitcoin and other cryptocurrencies are the stallions of a long race. She predicted that central banks would start formally introducing crypto regulations in their respective territories by the end of this year.
Bitcoin Liquidity Rates Remains Lower than Expectations
In the opinion of Laboure, BTC is going to stay a volatile and unstable digital asset for some time to come. This behavior is linked with the low liquidity rates of the flagship cryptocurrency. Bitcoin has seen massive growth since last year, and today it is trading ATH of $61,500. It is also expected to acquire a six figures evaluation by April 2021. However, despite its quick rise to popularity and monumental appreciation, the daily trade volume of BTC makes up only 1.9% of Gold.
Due to its huge market cap, Bitcoin has become 3rd most traded currency in the world after USD and Euro. However, its liquidity rate is still at the level of the Thai baht. Laure commented in her report that the liquidity problem of Bitcoin makes it just a drop in the ocean when compared with other huge investment pools and commodities like silver and gasoline. The daily transaction volume of BTC makes up roughly 0.009% of USD. It should be noted that these numbers account for volume and not the ratio statistics.
Is Bitcoin a threat to the Existence of Central Banks?
The figures issued by the Deutsche Bank project reveal that millennials believe that cryptocurrencies are the future of monetary trading and investment. In a survey conducted by the bank in major economies, including the USA, France, Spain, Italy, South Korea, Germany, China, and United Kingdom, a big chunk of people endorsed the crypto assets and voted in favor of these replacing fiat currency and debit/credit cards eventually.
However, Laboure is of the opinion that Bitcoin is getting appreciated due to the Tinker Bell Effect. It means that people only invest in it because they chose to believe that this commodity has value. The Deutsche Bank report further explained that Bitcoin and other cryptocurrencies might not be able to compete with or replace Fiat currencies as long as central banks exist. It should be noted that Bitcoin has been able to get its current ranking in one year only.