The past few months have witnessed a rapid crash in the value of majority cryptocurrencies, especially Bitcoin. But Wall Street giant Deutsche Bank has predicted that this is the end of the crash and Bitcoin will rebound soon.
The Wall Street heavyweight is optimistic about the prospects of Bitcoin, the largest cryptocurrency by market capitalization. The Bank’s analysts also compared Bitcoin’s prospects to the $72 billion diamond market.
As per crypto market analysts at Deutsche Bank, the price of Bitcoin might hit the $30,000 mark by the end of 2022. The analysts emphasised the cryptocurrency’s close association with the global stock markets, especially American stocks, and argued that Bitcoin is more comparable to diamonds than digital gold with which it is commonly associated.
“The De Beers (diamond corporation) built a strong basis for the $72 billion per year diamond industry, which it has dominated for the past eight decades, by promoting an idea rather than a tangible good. What is valid for diamonds is valid for a number of other products and services, including Bitcoins,” the analysts from the Bank said in a statement.
Interestingly, Bitcoin’s reputation as an asset that performs similarly to gold in times of uncertainty has suffered as its price has fallen in response to rising inflation and the threat of a worldwide recession. Gold, on the other hand, has performed significantly better.
Deutsche Bank experts warn that the crypto market slump could last for some time due to “system complexity” and a lack of “value models.”
Following Bitcoin’s recent drop below $20,000, the sentiment in the crypto markets is gloomy. Some experts, like Peter Schiff, are predicting that more pain is to come for crypto investors as they are racing to withdraw their funds from exchanges. This is causing an alarm for crypto companies cause now they face a liquidity crisis.