Over the previous decade many have written off cryptocurrency and bitcoin as nothing more than a fad. In fact, even those who have turned away from the label of a pyramid scheme or a scam still see bitcoin as nothing more than a so-called flash-in-the-pan. This means that even though the phenomena is valid in itself those experts believe it is only a short and passing trend, and not a major economic or financial development.
At the same time, how many inherent problems of the bitcoin cryptocurrency network helped the skeptics keep their position. Volatility is the best example and the bitcoin price remains extremely unstable. Currently it does look like the price will end the year more than twice its price in January of 2019. But in the previous 12-months period the ups and downs of the network and its market share and price very massive.
Yet experts from a huge financial institution believe that there is a big possibility in bitcoin especially in the decade to come. Here is what the professionals from the Deutsche Bank believe that might lie in store for cryptocurrencies in in the next 10 years.
The Deutsche Bank Question
In previous years, the Deutsche Bank came under a lot of pressure for a range of reasons.The the same situation continuous and the bank is seen by many as an embattled entity. However its status in the relevance in the financial domain continues to be undisputed. This is why its analysis of the cryptocurrency market is so interesting. In the mainstream comprehension of the cryptocurrency market, there is little doubt that hard times are up ahead.
A similar scenario almost always active in these quarters but now, now especially with another cryptocurrency winter in the cards, the voices are once again the loudest ones. Now descriptions of the crypto ecosystem once more focus negative aspects like the price fragility and ever-present volatility of both price and market cap moment. However things are not much better for the traditional system either. The recent years brought about many stresses and strains that are putting fiat currencies in a very similar situation. One does not need to look further than the ongoing trade war between the US and China. In this environment the Deutsche Bank simply ask itself whether the current economic and financial system will survive.
The bank report shows that the currency system is held together by principles and forces that will get gradually weaker and weaker in the 2020s. As this process takes place, the confidence of the ordinary users will also continue to be degraded. After all, all the present and previous confidence was not brought on by anything else than simple usability and stability. If the environment of the new economic realities gradually take these away, the users will not be sentimental about reaching out for alternatives.
Naturally alternatives are already in place for such a scenario. On one hand, there is gold, which even the central banks are purchasing for a rising number of nations. For many, this is a clear sign that the gold era is about to kick into an even higher gear once the ordinary population starts to purchase it as a means of value safekeeping and even transaction. The new force is naturally the cryptocurrencies. They could also serve the same purpose inside of a financial environment where the basic market forces do not prop up traditional currencies anymore.
There are many reasons for the change. Firstly, there are decades and decades of ever-dropping labor costs, as well as the inflation that is weakening the current system. The same process has been going on for a long time and now the weaknesses of the traditional setup are clear. Furthermore there are even external signs that other big systems see their opportunity in this weakening state of fiat.
For example, Facebook and its Libra Project showcase the same concept even though they did not find a lot of support at this stage. Also it is clear that national banks are experimenting with their own versions of digital tokens. There is a standard need to address this as a desire to include new technological solutions. However, it is hard not to interpret this as another means of bracing against the storm of a failing traditional system.
The report clearly see that the current setup is not going to survive in this form for much longer. This does not mean that a devastating or catastrophic event is coming, but simply that the evolution and change will not stand down. This of course brings the whole issue to the question of bitcoin adoption. In many quarters the adoption is already well underway. Business areas and even whole industries, like for example esports entertainment, adopted bitcoin and other currencies without much fuss.
Ordinary individuals, especially those who live in societies where fiat is under pressure tend to do the same in ever-rising numbers. Even the level of development of the same nations is not that crucial, as both Hong Kong and Venezuela examples show. In in these locations cryptocurrency provided an alternative when the regular ATM machines started to run dry. However translating the same trend to nations and governments is not a simple copy and paste process. Central banks will definitely continue to resist investing in cryptocurrencies out of numerous fears.
Here, the biggest one is of course the problem of crypto not being regulated. As as long as it stays in this shape and avoids due regulatory processes, no bank will invest in it or get affiliated with it in any shape or form. Expecting them to do any differently is simply wishful thinking on the part of cryptocurrency enthusiasts. But through all of that, the wave of changes that is washing over the financial system will not relent. That in itself is the major chance for cryptocurrencies, if not in the 2020s, then surely in the decade that will follow them.