New @DeutscheBank future of payments report on Bitcoin is out.
Their top conclusion? Bitcoin is “too important to ignore”
It’s long but interesting with some neat charts so here’s a 🧵:
dbresearch.com/PROD/RPS_EN-PR…
Their top conclusion? Bitcoin is “too important to ignore”
It’s long but interesting with some neat charts so here’s a 🧵:
dbresearch.com/PROD/RPS_EN-PR…
2/ The title of the report is worth pondering:
“Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?”
There are pictures of little girls wearing fairy costumes on the cover and Peter Pan quotes inside.
“Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?”
There are pictures of little girls wearing fairy costumes on the cover and Peter Pan quotes inside.
3/ DB: “Bitcoin’s value will continue to rise/fall depending on what people believe it is worth. This is the Tinkerbell Effect: the more believe in something the likelier it is to happen based on Peter Pan’s assertion that Tinkerbell exists because children believe she exists”
4/ DB says central banks and governments understand that Bitcoin is “here to stay,” and says regulation will come this year or next alongside the rollout of Central Bank Digital Currencies.
Hrm. Too little, too late?
Hrm. Too little, too late?
5/ DB includes a rather bullish quote from Eric Schmidt:
“As Bitcoin grows, the value grows. As people move into Bitcoin for payments and receipts, they stop using US dollars, Euros, and Chinese Yuan, which in the long term devalues these currencies"
“As Bitcoin grows, the value grows. As people move into Bitcoin for payments and receipts, they stop using US dollars, Euros, and Chinese Yuan, which in the long term devalues these currencies"
6/ DB says Bitcoin is mainly used today as a financial investment, not really for payments.
And that it will continue to be volatile.
Yup!
And that it will continue to be volatile.
Yup!
7/ Interesting juxtaposition of quotes from @jack, who says Bitcoin will ultimately be the world’s single currency, and Warren Buffet, who says the whole thing is a mirage: 
8/ DB: “Every year people declare Bitcoin (and Tesla) as dead or dying.
Since 100, Bitcoin has been declared dead about 400 times...
The trend has been decreasing, 2020 saw the fewest obituary predictions in eight years."
Since 100, Bitcoin has been declared dead about 400 times...
The trend has been decreasing, 2020 saw the fewest obituary predictions in eight years."
9/ DB shares this hilarious chart:
10/ DB repeats the myth that Bitcoin "has no backing or intrinsic value," ignoring the fact that it is and always has been thermodynamically backed by energy, which through Proof-of-Work gives Bitcoin intrinsic value as the world's only decentralized digital scarce asset.
11/ DB gets bonus points for talking about the importance of 21 million and the halving and the difficulty adjustment (impressive!), but these are sadly nullified by references to Cardano, Polkadot, and Chainlink.
12/ DB: Bitcoin mining could have a “positive externality, that is, technological innovation in the financial sector [could] drive innovation in the energy sector."
Yes.
Yes.
13/ DB: “The key difference between Bitcoin and currencies today is on the supply side. Supply of Bitcoin is fixed, while in many fiat currencies central banks control the supply and have been increasing it in recent years via their QE programs"
Bingo!
Bingo!
14/ DB then writes a bunch of stuff on alt coins.
Thought this quote was funny, though:
“We also wonder whether cannibalisation between these cryptocurrencies might occur"
Thought this quote was funny, though:
“We also wonder whether cannibalisation between these cryptocurrencies might occur"
15/ DB: “In 2019, just over 2% of the cryptocurrency activity was linked to illicit activity, and in 2020 it was down to only .3%"
Big of them to include and admit that!
Big of them to include and admit that!
16/ DB shares cool chart on publicly traded hodlers:
17/ DB: “The chart shows adoption rates of blockchain wallets with the equivalent of internet adoption rates.
We are still in the early days, but the curves are similar after adjusting for scale.
Indeed, if current trends continue there could be 200M users in 2030”
Wow.
We are still in the early days, but the curves are similar after adjusting for scale.
Indeed, if current trends continue there could be 200M users in 2030”
Wow.
18/ DB says “around a third” of millennials believe that cryptocurrencies are replacing cash and credit/debit cards.
From a survey of 4,700 people in the US, Europe, and Asia.
Pretty wild.
From a survey of 4,700 people in the US, Europe, and Asia.
Pretty wild.
19/ DB: “In terms of total currency in circulation, Bitcoin is the third-largest in the world, after the US dollar and the euro” — not really sure about this chart, but wow.
20/ DB: “if we look at the market cap of its stocks, Bitcoin is today ranked sixth—between Alphabet and Tencent, and bigger than Facebook” Another wow.
21/ DB concludes by saying that Bitcoin is here to stay but that they don't think it will likely *eat all traditional currencies in the world*
Which is, needless to say, a pretty high bar for Bitcoin, and it is noteworthy that this possibility is even mentioned.
Which is, needless to say, a pretty high bar for Bitcoin, and it is noteworthy that this possibility is even mentioned.
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