In the USA, leading commercial banks have been pointing out the advantages of Bitcoin as a value store for some time. Now also the Deutsche Bank reports that Bitcoin of the classical solution gold as inflation protection decreases market shares.
Not only experts suspect it already for months: As a result of the Corona crisis it is a combination of record-breaking new debts of the public budgets, coupled with expansive monetary policy of the central banks, from which considerable inflation risks arise. But how do you protect yourself against this? In earlier crises, gold was considered a safe haven and will be available again in 2020. But at least in the clarity surprisingly it is this time Bitcoin (BTC), where citizens and enterprises prefer to shift their money reserves. Deutsche Bank is now also drawing attention to this. In a short market report Jim Reid for the Deutsche Bank to words, its indication chief for global credit strategies announces itself. According to its numbers in the last months Bitcoin in the price development gold ran off clearly the rank and it is to be also observed that investors inquire Bitcoin very much more frequently than inflation protection.
Why is Bitcoin suitable as a bulwark against inflation?
So that an asset class can absorb possible inflation, it must be clearly ahead of inflation in its price development. The price of Bitcoin is in 2020 with the current quotation of around 18,000 US dollars since the beginning of the year more than 140 percent in the plus, gold comes after all on well 20 percent plus. But the partly strong price fluctuations of Bitcoin are not always good for weak nerves, gold does not have to fight with such high volatility.
Nevertheless the designation of Bitcoin as “digital gold” has already become naturalized. Because Bitcoin is independent of monetary policy, accepted worldwide and limited in its quantity. There will be only 21 million BTC once, a good 18.5 million Bitcoin have already been generated. Bitcoin halving every four years slows down the process by which new BTCs are created. The most recent Bitcoin Halving took place this May, and it has fulfilled its role as a brake on inflation as expected. In addition to this ingenious concept of Bitcoin, it is also the fact that transport and storage costs are largely eliminated compared to gold that makes BTC so attractive for professionals.
Many experts therefore expect Bitcoin to become the leading value store in the 21st century. The major US bank JP Morgan already noticed such tendencies at the beginning of November, and Deutsche Bank is now following suit. If one puts the comparison with gold as basis for price prognoses with Bitcoin, the Citibank comes on a Zielmarke of 318,000 US Dollar per BTC already at the end of 2021. The Bavarian national bank had already gone through the comparison Bitcoin to gold before the Corona pandemic and expects medium-term 90,000 US Dollar as course mark for Bitcoin. So even the traditionally conservative analysts from the banking side see Bitcoin as a store of value with considerable profit opportunities.
Companies such as MicroStrategy and Square as well as super-rich companies follow this view. And their strategy pays off, because the price curve of Bitcoin turns actually again its completely own round, usually uncoupled from gold and other asset classes.
Conclusion: Bitcoin more than “just” a safe haven
Reasons for the recent Bitcoin Boom we have recently explained for you. The indirect recommendation of the German bank per Bitcoin fits thereby into the raster and is a far proof of why BTC belongs into each Portfolio, which has inflation protection as a goal. The prospects of far above average net yields for Investments in Bitcoin are a plus point, which gold cannot exhibit at present in the order of magnitude any longer.
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