2 years ago
93 Marion Laboure, a Deutsche Bank analyst, has stated that Bitcoin has the potential to become ‘Digital Gold, while Ethereum could become ‘Digital Silver’. While the report addressed the benefits of these two cryptocurrencies, it also mentioned their limitations.
Laboure stated that the increasing rate of adoption for the Ethereum network by decentralized finance (DeFi) and non-fungible tokens guaranteed it a future in the crypto space. The analyst further stated that there was little chance that any other cryptocurrency could surpass Bitcoin and Ethereum.
Bitcoin and Ethereum have their Limitations
In the report, Laboure also focused on some limitations of Bitcoin and Ethereum, despite their rising popularity. Some of the disadvantages that Laboure highlighted include high volatility, lack of a clear regulatory framework and energy-intensive mining and transaction activities.
However, despite these disadvantages, he stated that cryptocurrencies were still a better alternative than cash as a payment method, stating that cash transactions would soon become extinct.
“People have always sought assets that were not controlled by governments. Gold has had this role for centuries. And yes, I could potentially see Bitcoin becoming the 21st-century digital gold. Let’s not forget that gold was also volatile historically. But, it is important to keep in mind that Bitcoin is risky.”
Laboure stated that Bitcoin did not have a strong use case in being used as a store of value, but it would remain ultra-volatile in the short term.
Bitcoin has Advantages over Fiat
The Deutsche Bank analyst also addressed the relationship between Bitcoin and fiat currencies. Laboure stated that the limited supply of Bitcoin made it a better alternative than fiat when it came to matters inflation.
The analyst referred to Bitcoin’s capped supply at below 21 million. Laboure further stated that out of this figure, 89% was already in circulation, contributing to further increases in Bitcoin’s value.
In the case of fiat currencies, the supply is determined by central banks, which have been increasing this supply over the years, which has harmed prices. Cryptocurrencies are also gaining increased use cases as Bitcoin was recently endorsed as a legal tender by El Salvador.
