Deutsche Bank’s chief strategist has said that he wouldn’t recommend bitcoin as an investment option.
Ulrich Stephan, chief strategist at Germany’s global banking and financial services company, said this week:
I would simply not recommend this to the everyday investor.
According to a report from Reuters, the main reasons for Stephan’s comment is due to the fact that the digital currency’s price fluctuates too much and regulation is non-existent.
Since the beginning of the year, bitcoin has increased its value eight-fold. Data from CoinMarketCap, shows that it is currently trading at $8,178, with a market cap worth $136.5 billion.
With the cryptocurrency increasing in value, many have given price predictions as to where they believe it will head next. Billionaire hedge fund manager Mike Novogratz believes that it will reach $10,000 before the end of the year. Whereas, Ronnie Moas, analyst and founder of Standpoint Research, is of the opinion that it can reach $14,000 in 2018. Max Keiser, host of the ‘Keiser Report’ is more bullish in his price projections and thinks bitcoin has the potential to reach $100,000.
The recommendation from Deutsche Bank is certainly interesting given the fact that it was fined $630 million in January after U.S. and U.K. authorities said that the bank used offices in Moscow and London to move $10 billion of Russian money laundering out of the country.
At the time it was reported by the U.K.’s Financial Conduct Authority (FCA), that Deutsche Bank’s anti-money laundering (AML) controls were not tough enough to prevent the bank from being used by unidentified customers to transfer approximately $10 billion from Russia to offshore bank accounts.
Interestingly, while the German bank doesn’t recommend the use of bitcoin as an investment option, neither does it appear to hold much faith in fiat monetary system either. Earlier this month, it was reported that a top strategist from the bank had said that we may be looking at the ‘start of the end of fiat money.’
According to Jim Reid, Deutsche Bank strategist, he envisions that the current monetary system could begin to collapse within the next decade. This in turn may provide the opportunity to create an alternative currency system.
Although the current speculative interest in cryptocurrencies is more to do with blockchain technology than a loss of faith in paper money, at some point there will likely be some median of exchange that becomes more universal and a competitor of paper money.
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Last modified: May 20, 2020 9:25 PM