Deutsche Bank, in its published report, says that bitcoin has become too important to ignore. As it has become the third-largest currency globally in terms of the total value in circulation.
Bitcoin has become the third-largest currency in circulation, making it very difficult to ignore. Additionally, the bank says that governments and central banks seem to realize that cryptocurrencies are not just a fad. But it has value and it is here to stay. Thus, giving more reasons for them to start formulating the regulations of the industry this year.
Last week, the research team of the Deutsche Bank published a report entitled: “Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?” The report authored by Marion Laboure is part of the whole publication entitled: “The Future of Payments: Series 2.”
The third-largest currency has a total market cap of $1 trillion
Bitcoin’s total market cap of $1 trillion makes it too important to be ignored. So long as asset managers and institutional companies continue to enter the market, bitcoin prices can still go up further.
Currently, the bitcoin price still hovers above the $50,000 level after breaking over $60,000 around last week. Bringing the total market cap to over $1 trillion bitcoin website shows.
The report also explains bitcoin as a commodity, currency, and equity. Although bitcoin’s transactions and tradability are still low comparatively. However, the report highlights the cryptocurrency’s market cap remains among the top ten, both in relation to currency and stock. Making bitcoin comparable to fiat currencies.
In relation to the total currency being in circulation, bitcoin comes in third among the largest in the whole world. Next to the US dollar and the Euro pound, and surpassing Japanese Yen and Indian Rupee.
Bitcoin’s circulation has surged over the past two years
The report attributed this to the huge increase in bitcoin’s value recently. Additionally, the report says that during 2019, bitcoin only represented around 3% of the total US dollars in circulation. Surprisingly, after two years, the number has surged to about 40% of the total US dollars in circulation.
Laboure is quite confident that bitcoin’s value will continue to accelerate or drop depending on people’s perception of its worth. Calling it the “Tinkerbell Effect”, which is an accepted economic term. It means that what happens follows what people perceived it to be. In the short term, its values are expected to remain volatile. However, over the long term, it is a bit dependent on central bank regulation.
Furthermore, the Deutsche Bank analyst asserts that Central Banks and Governments must have understood that cryptocurrencies are here to stay. Therefore, they better start formulating regulations for the crypto-assets this year.
The Deutsche Bank also reported that the Central banks are expediting their research on the possibility of their own digital currencies. of central bank digital currencies (CBDCs).
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