The market capitalization of Bitcoin, which has reached $1 trillion, and the potential to continue to grow have made crypto “too important to ignore,” according to analysts from Deutsche Bank.
Deutsche Bank Research, which is the financial research subsidiary of global banking giant Deutsche Bank, has released an 18-page report on Bitcoin. It is titled: “The Future of Payments: Series 2 Part III. Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?”
In the report, Deutsche Bank Research looks at the basic characteristics of Bitcoin and the key drivers for its historical price growth to becoming a $1 trillion asset.
The analysts at Deutsche Bank agree that Bitcoin’s price “could continue to rise” for as long as asset managers and companies will continue to enter the crypto market. They also mention that central banks and governments now “understand that Bitcoin and other cryptocurrencies are here to stay,” so they will probably start regulating them by the end of the year.
Even with its value growing, Bitcoin’s usage as an asset class may be hampered by its “still limited” traceability and liquidity, the researchers have warned. “The real debate is whether rising valuations alone can be reason enough for bitcoin to evolve into an asset class, or whether its illiquidity is an obstacle,” they’ve mentioned.
They also expect Bitcoin to “remain ultra volatile” in the short term, but they predict that the King of Crypto will have a turning point in the following “two to three years” as regulators will come to a consensus about it.