Bitcoin is now “too important to ignore,” given a new report from Deutsche Bank, given its $ 1 trillion market cap, and its price could continue to rise as long as companies and asset managers continue to buy BTC.
According to the report by analyst and Harvard economist Marion Laboure, the real debate is whether Bitcoin’s development into an asset class in its own right is based on valuation alone, as the relatively low liquidity and tradability of the cryptocurrency remains an obstacle.
Laboure compared Bitcoin to Apple stocks, pointing out that 28 million BTC, which is 150% of all coins in circulation, changed hands in the past year. This compares with 40 billion Apple shares trading, which is 270% of the total number of shares in circulation.
The price of Bitcoin is affected by large purchases due to its volatility. However, the price will keep going up and down based on what people think it’s worth based on what is known as the “Tinkerbell Effect”.
According to MarketWatch, the Tinkerbell Effect is an economic term that describes “how likely it is that something will happen when more people believe in it”. It is named after Peter Pan’s claim that the fairy Tinkerbell exists because children believe it does.
Laboure further compared Bitcoin to the electric car maker Tesla, as the cryptocurrency “needs to convert potential into results in order to maintain its value proposition”. Just like BTC, Tesla sparked debates about whether it was the future of the auto industry or a fad, but sentiment changed after successful large-scale car shipments began.
The report comes after major banks made headlines on crypto news. Morgan Stanley is expected to be the first major bank in the US to offer its wealth management clients access to bitcoin funds. Bank of America, on the other hand, published a report citing BTC as the main argument behind the cryptocurrency’s price increase.
The world’s largest custodian, the Bank of New York Mellon (NYSE: BK), has invested in crypto custody through a $ 133 million financing round in which hedge fund Coatue Management, growth stock firm Stripes, and others participated. Startup Fireblocks invests.