A senior economist at Deutsche Bank predicts that Bitcoin (BTC) will remain “ultra volatile” for the foreseeable future.
Marion Laboure, a market strategist at Deutsche Bank, one of the world’s most important banks, said that BTC would potentially be the gold of the 21st century. Still, he says that BTC’s high volatility is keeping it from serving as an effective store of value, and its price volatility isn’t going away anytime soon, for three reasons.
“I expect BTC to continue to experience high volatility for the foreseeable future. There are basically three main reasons for this: First, about two-thirds of Bitcoins are used for investments and speculation. Second, due to its limited trade, just a few additional large purchases or market exits can significantly affect the supply-demand balance. Third, the value of Bitcoin will continue to rise and fall depending on what people believe it is worth. Small changes in investors’ overall perception of Bitcoin can have a huge impact on its price.”
Looking at the ranking of crypto assets by market cap, Laboure stated that he does not believe that any other digital currency could surpass Bitcoin or Ethereum (ETH) in the next five years.
According to the analyst, ETH’s support of decentralized finance (DeFi) and immutable tokens (NFTs) is highly valuable: “If Bitcoin is sometimes called ‘digital gold’, then Ethereum should be called ‘digital silver’!” he said.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.