As demand for Bitcoin has accelerated even further with CFTC’s approval of CME Group and CBOE to list bitcoin futures on their exchanges, the price of the BTC/USD has exploded to over $17,000. The currency pair is now up 60% in a week.
Deutsche Bank, one of the largest banks in the world, has released a statement commenting on the cryptocurrency’s potential to replace traditional money:
“As Bitcoin smashes through the 15,000 US dollar mark, Deutsche Bank Wealth Management examines the risks of investing in so-called cryptocurrencies and whether they could replace traditional money. In the latest CIO Insights Reflections, the Chief Investment Office argues that cryptocurrencies remain a risky investment, given that recent price rises have been due to speculation as well as imbalances between supply and demand. Greater regulation and security may be necessary to establish cryptocurrencies as a viable asset class in future.
“If cryptocurrencies are to replace money, then they have to fulfil money’s three core functions: as medium of exchange, a measure of value and a store of value. To do this, cryptocurrencies must be more trusted. Problems here include high volatility and possible price manipulation as well as data loss or data theft.”
In the meantime, Coinbase, an online platform that provides cryptocurrency trading services, has admitted to be struggling to keep up with demand and warned buyers to invest responsibly: “More people are engaging with our platform than ever and that bodes well for the future of the digital currency. At the same time, it does create extreme volatility and stress on our systems. “Coinbase is investing heavily to scale the platform, but for now, some downtime may be an inevitable consequence of such strong demand. Moreover, the company advised investors to be educated on the matter: “We also wanted to remind customers of some of the risks associated with trading digital currency. Digital currencies are volatile and the prices can go up and down. Due to the rapidly changing price of digital currencies, some customers may not have sell limits that are sufficient relative to the value of total digital currency they are storing on Coinbase. Sell limits are one of the many measures Coinbase takes to protect client accounts and assets.”
