In a very interesting interview with Analyst at Deutsche Bank Research that was published officially on DB website Marion Laboure explained some simple but important facts about Bitcoin and its deflationary characteristics:
The supply of Bitcoins is fixed. The maximum number of Bitcoins that will ever exist is just lower than 21 million. And round about 89 percent of the total supply of Bitcoin is already in circulation. In numerous fiat currencies central banks control the supply and have actually been increasing it substantially recently.
Bitcoin is clearly the leader, and the most traded crypto. Its market cap is methods larger than the market cap of the second Ethereum, which offers numerous applications and use cases, such as decentralized financing (DeFi) and non-fungible token (NFT). If Bitcoin is in some cases called “digital gold”, Ethereum would then be the “digital silver”!
It appears really unlikely that another crypto-currency can end up being stronger than Bitcoin and Ethereum in 5 years because of the network result. Bitcoin enjoyed first-mover advantage, and is now the most traded and well-known crypto-currency. And Ethereum has numerous genuine applications as we stated previously.
Individuals have always looked for possessions that were not controlled by governments. Gold has had this function for centuries. And yes, I might possibly see Bitcoin to become the 21st century digital gold. Let’s not forget that gold was likewise unpredictable traditionally. But it is very important to bear in mind that Bitcoin is dangerous: it is too unpredictable to be a trusted shop of value today. And I anticipate it to stay ultra-volatile in the foreseeable future.
It is basically 3 reasons for this: First, about two-thirds of Bitcoins are utilized for investments and speculation. Second, due to its limited tradability, simply a few additional large purchases or market exits can substantially affect the supply-demand equilibrium. Third, Bitcoin’s worth will continue to fluctuate depending on what individuals believe it deserves. Small changes in investors’ general understandings about Bitcoin can have a big impact on its cost.
