Bitcoin is frequently, or was once, compared to gold, but it’s an even more precious commodity that Deutsche Bank (ETR:DBKGn) likened the cryptocurrency to in a published research yesterday, as reported by Bloomberg.
According to Mr. Laboure and Ms. Pozdnyakova, DB strategists, digital money is more analogous to diamonds than gold, a stable and safe commodity.
They highlighted the story of De Beers, a significant player in the diamond business that used advertising to change public opinion about diamonds.
“By promoting a concept rather than a commodity, they’ve laid the groundwork for the $72 billion-a-year diamond business that they’ve dominated for the past eighty years.” As is true for diamonds, it is also true for many other commodities and services, including bitcoins,” they stated.
Analysts also noted that cryptocurrencies have been increasingly associated with benchmarks such as the Nasdaq 100 and S&P 500 since November. Bitcoin might follow suit before the end of the year.
They anticipated that bitcoin would reach $28,000 by the end of the year based on this correlation.
Theirs, on the other hand, is far from mindlessly bullish. Indeed, they cited some of the current concerns afflicting the cryptocurrency industry, such as the danger of bankruptcy for some hedge funds and digital asset lenders.
“Because there are no common valuation patterns like those found in the public equity system, it is difficult to stabilize token values. Furthermore, the cryptocurrency market is very fragmented “They concluded by saying:
“Because of the system’s complexity, cryptocurrency freefall may continue.”