A client note from analysts at DB on Bitcoin. Follows the rout in the crypto over the past week or so.
DB says the drop was triggered by a tweet (from Musk) and a China statement.
(For clarity, there were a few statements out of China:
- China bans financial institutions from offering cryptocurrency services (this was a rehash of what was already known)
- PBOC social media post - digital tokens cannot be used as a form of payment (this was on the day of the huge plunge in BTC which culminated in lows circa $30K
I really should add there is plenty of talk of a campaign that was waged to send the price down, posts on Chinese social media and what have you. Anyway, back to DB's note)
DB:
- Those few words caused bitcoin’s value to plummet from nearly $60,000 in the days before to below $48,000
- on Tuesday, the PBoC reiterated that it would ban digital tokens as a means of payment, thus causing Bitcoin to plunge just above $30,000 at one point
DB then argues that
- the real debate is whether rising valuations alone can be reason enough for bitcoin to evolve into an asset class, or whether its illiquidity is an obstacle
- the value of bitcoin is entirely based on wishful thinking
Hmmmm. DB not mentioning other cryptos now competing with BTC, other cryptos with higher utility (can be used for reliably for payments etc., see this here: Bitcoin crumbles after Elon Musk bails. Why it may never recover).
