Marion Labore, an analyst in the research division of Deutsche Bank, predicts that Bitcoin will take on the role of digital gold in the future: not being controlled by any government, it will last for centuries.
In an update to Deutsche Bank’s website regarding the future of the largest banking institution in Germany, Laboure said that could “potentially see Bitcoin become the digital gold of the 21st century“, but warns investors about the volatility of the crypto asset. According to the analyst, most Bitcoin (BTC) purchases are made for investment and speculation, rather than for use as a medium of exchange:
“To date, a few large purchases or exits from the market can have a significant impact on the balance between supply and demand. Bitcoin is still too volatile to be a reliable store of value. I expect it to remain ultra-volatile for the foreseeable future.”
Although the Deutsche Bank analyst expressed concern about the lack of regulation on cryptocurrencies and their potential impact on the environment, he hinted that Bitcoin will likely remain the dominant digital asset in the crypto sector. Ethereum may have more use cases in decentralized finance with the growth of non-fungible tokens, but Bitcoin still enjoys its “first-mover advantage”:
If Bitcoin is digital gold, Ethereum should be ‘digital silver’.
Related: Bloomberg Senior Strategist: Bitcoin is ‘blacking out’ gold as a store of value
Deutsche Bank analysts previously described Bitcoin as a cryptocurrency “too important to ignore,“suggesting that the price of the asset is likely to increase as more wealth managers and companies enter the market. In 2019, the financial institution predicted that digital currencies will replace fiat currencies by 2030.