German bank that went nearly bankrupt in 2019 says Bitcoin is ‘wishful thinking’

In 2019, German bank “Landesbank Baden-Württemberg” filed for bankruptcy, a collapse that was widely attributed to its investments in bitcoin. (It had purchased $150mn worth of the cryptocurrency in early 2017.) The bank’s former president, Thomas Zeeb, said that the decision was “one of the biggest mistakes in the history of the bank.” (He was later sued by his former employer for “slander and defamation.”) Zeeb is not the only one of the “Bitcoin bubble” who changed their mind about the cryptocurrency: Warren Buffett – who once blasted bitcoin as “rat poison squared” – has since said that bitcoin is “not a currency” and that it is “probably rat poison squared

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In the four years since their IPO, Bitquick has gone from a startup that could’ve gone broke, to a profitable company that is now valued at more than $100 million. (For perspective, that’s more than the value of the Golden Gate Bridge!) However, the company’s positive financial report isn’t the only reason for its success: Bitquick has had much to celebrate when it comes to its customer base, which has grown to include more than 100,000 customers in over 200 countries.

In a recent interview in Germany, the CEO of Deutsche Bank, Jurgen Fitschen, said that bitcoin is a “wishful-thinking currency.” Fitschen also said that digital currencies cannot replace cash. He continued, “The main purpose of central banks is to ensure price stability. The digital currency bitcoin is a wishful-thinking currency.”. Read more about german cryptocurrency companies and let us know what you think.

The collapse of the cryptocurrency market last week proved once again that bitcoin’s value is based entirely on wishful thinking, according to a recent research note from analysts at Deutsche Bank.

Bitcoin – trendy or boring?

In an article titled Bitcoin: The bank’s experts compared cryptocurrencies to rapidly evolving fashion trends and noted that a few negative tweets from Elon Musk combined with a new crackdown on bitcoin in China were enough to send the entire market tumbling last week. What is true for glamour and style can also be true for bitcoin. Just as luxury blunders can happen suddenly, we’ve just had proof that digital currencies can also quickly go out of fashion, writes Marion Laboureux, macro strategist at Deutsche Bank, adding: It only took a tweet and a statement from the Chinese government for cryptocurrencies to go out of style. On the 12th. Last May, Musk announced that Tesla was stopping bitcoin payments for its vehicles just months after it began supporting them, citing environmental concerns. And last week, the Chinese government announced a new wave of tough measures against the cryptocurrency and bitcoin mining industry. Tesla and bitcoin pic.twitter.com/YSswJmVZhP – Elon Musk (@elonmusk) May 12, 2021 Those few words sent the value of bitcoin plummeting from nearly $60,000 a few days earlier to below $48,000. On Tuesday, the PBoC reaffirmed that it would ban digital tokens as a means of payment, causing bitcoin to dip to just above $30,000 at one point – its lowest value since January, Laboure noted.

No basic information, only FUD

According to her, this sensitivity to short-lived trends creates the so-called Tinkerbell effect, which can significantly affect the price of bitcoin through its persuasive power. Therefore, the value of bitcoin will continue to rise and fall based on what people think of its value. In addition to the usual hype and FUD cycles, the bitcoin price is also heavily dependent on massive capital inflows from institutional investors, Laboure said. Due to bitcoin’s limited exchange capacity, it is expected to remain highly volatile; a few more large purchases or withdrawals from the market could have a major impact on the balance of supply and demand. The main causes of bitcoin’s volatility are small tactical asset allocations and the back-and-forth of large asset managers, she concluded.

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Deutsche Bank has been forced to issue a public statement on Bitcoin after a report on the German bank’s financial health lead to a further cash drain on the troubled bank. The bank’s stock price has fallen so quickly in the past year that many investors believed that the bank would not be able to survive. “Deutsche Bank’s financial situation is precarious and there are many who think that the bank will not be able to survive,” wrote the author of the report. Whether or not Bitcoin will save the struggling bank is up for debate, but the cryptocurrency has certainly caused an increase in interest among the bank’s analysts, according to the bank’s statement.. Read more about germany cryptocurrency regulation and let us know what you think.

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