Bitcoin cannot be a reliable store of value due to volatility, claims Deutsche Bank

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on  Jan 28, 2020
Updated:  May 7, 2020
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  • The German Deutsche Bank recently published two parts of a three-part report, focusing on digital currencies.
  • The published segments claim that crypto has potential, but that Bitcoin is too volatile to be a reliable store of value.
  • The bank also predicts that cash will not be abandoned for decades to come.

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There have been many speculations regarding the potential future of Bitcoin, with some viewing it as the future currency to buy, and others seeing it as a store of value that could replace actual gold. The discussions on this very subject are still as strong as ever, and the recent contribution to it came from the financial services giant, the Deutsche Bank.

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According to the bank, it recently conducted
research that has shown that BTC price fluctuations are too volatile for it to
be a reliable store of value. The report in question is the first of the three
reports titled ‘The Future of Payments.’

Is Bitcoin’s volatility too
limiting?

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The Deutsche Bank published the reports last
week, and in them, it admits that cryptos have passed the ‘tipping point’ that
was needed for them to become fashionable. However, the bank stresses that they
are still in a very early stage of adoption.

It then focused on Bitcoin specifically, stating that the world’s first and largest digital currency is too volatile and that it cannot act as a reliable store of value. The bank pointed out Bitcoin’s sudden rise to its current ATH of $20,000, which was followed by a crash which eventually led down to $3,200.

Furthermore, the bank also addressed BTC
payments, stating that they are still tiny when compared to the total global
payments. However, it did admit that the payments are taking off.

In the end, the bank stated that digital currencies do have potential and that they could eventually ‘revolutionize’ payments. The report even states that new mainstream crypto might rise in the near future and take over the market. Meanwhile, the second part of the report series stated that cash would still remain around for decades to come, despite more convenient payment methods. This comes despite the fact that the bank recently said that crypto might replace cash over the next 10 years due to the fiat system being ‘fragile.’ The third and final report has yet to be published, although it appears that it will also focus heavily on digital currencies.

 

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