Anti-BTC Rant
By Bhushan Akolkar
IN BRIEF
The Deutsche Bank executive referred to Bitcoin’s value as the “Tinkerbell effect”.
JPMorgan notes institutions are now moving from Bitcoin to Gold.
Bitcoin’s (BTC) plunge this week has not only shaken investors but also rattled banking institutions. While the institutional players continue buying the dips, the traditional banks have once again joined the anti-Bitcoin rant.
Germany’s biggest banking institution published a note “Bitcoin: Trendy is the last stage before tacky,” on Thursday, May 20. While quoting fashion icon Karl Lagerfield, Deutsche Bank’s Marion Labouré said:
“What’s true for glamour and style might also be true for bitcoin. Just as a ‘fashion faux pas’ can happen suddenly, we just received the proof that digital currencies can also quickly become passé.”
She further referred to the Bitcoin phenomenon as the “Tinkerbell effect”. Labouré added:
“The value of bitcoin is entirely based on wishful thinking. Bitcoin’s value will continue to rise and fall depending on what people believe it is worth”.
Labouré also pointed out Bitcoin’s vulnerability to react to some news and tweets. As we know, Elon Musk’s Bitcoin bashing tweets earlier this week followed by China’s crackdown caused the entire crypto market to take a nosedive on Wednesday.
While Marion Labouré states that Bitcoin’s $1 trillion valuations certainly make it attractive, it still has limited utility for transactions. Speaking to Yahoo Finance, she adds: 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.”
Global Banks Join Anti-Bitcoin Rant
Just one BTC price correction was enough for traditional banks to hop on to their anti-Bitcoin rant while completely ignoring the phenomenal rally that the crypto asset registered earlier. UBS global wealth management, CIO Mark Haefele called Bitcoin a “speculative asset” referring to Wednesday’s price crash.
Referring to crypto in general, Haefele added that investors really don’t need to have crypto in their portfolio. “The portfolio benefits of holding cryptos are limited, in our view,” he added. Reminding his clients he further added: “only a handful of companies accept them as a means of payment” and that “most recently, Tesla reversed a decision to do so.”
In a recent note to clients, the JPMorgan strategists also noted that “institutional investors appear to be shifting away from bitcoin and back into traditional gold, reversing the trend of the previous two quarters,” while questioning Bitcoin’s status as a gold alternative.
Vitalik Buterin: Crypto is a Bubble But Isn’t a Toy
By Bhushan Akolkar
IN BRIEF
The Deutsche Bank executive referred to Bitcoin’s value as the “Tinkerbell effect”.
JPMorgan notes institutions are now moving from Bitcoin to Gold.
Bitcoin’s (BTC) plunge this week has not only shaken investors but also rattled banking institutions. While the institutional players continue buying the dips, the traditional banks have once again joined the anti-Bitcoin rant.
Germany’s biggest banking institution published a note “Bitcoin: Trendy is the last stage before tacky,” on Thursday, May 20. While quoting fashion icon Karl Lagerfield, Deutsche Bank’s Marion Labouré said:
“What’s true for glamour and style might also be true for bitcoin. Just as a ‘fashion faux pas’ can happen suddenly, we just received the proof that digital currencies can also quickly become passé.”
She further referred to the Bitcoin phenomenon as the “Tinkerbell effect”. Labouré added:
“The value of bitcoin is entirely based on wishful thinking. Bitcoin’s value will continue to rise and fall depending on what people believe it is worth”.
Labouré also pointed out Bitcoin’s vulnerability to react to some news and tweets. As we know, Elon Musk’s Bitcoin bashing tweets earlier this week followed by China’s crackdown caused the entire crypto market to take a nosedive on Wednesday.
While Marion Labouré states that Bitcoin’s $1 trillion valuations certainly make it attractive, it still has limited utility for transactions. Speaking to Yahoo Finance, she adds: 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.”
Global Banks Join Anti-Bitcoin Rant
Just one BTC price correction was enough for traditional banks to hop on to their anti-Bitcoin rant while completely ignoring the phenomenal rally that the crypto asset registered earlier. UBS global wealth management, CIO Mark Haefele called Bitcoin a “speculative asset” referring to Wednesday’s price crash.
Referring to crypto in general, Haefele added that investors really don’t need to have crypto in their portfolio. “The portfolio benefits of holding cryptos are limited, in our view,” he added. Reminding his clients he further added: “only a handful of companies accept them as a means of payment” and that “most recently, Tesla reversed a decision to do so.”
In a recent note to clients, the JPMorgan strategists also noted that “institutional investors appear to be shifting away from bitcoin and back into traditional gold, reversing the trend of the previous two quarters,” while questioning Bitcoin’s status as a gold alternative.
Vitalik Buterin: Crypto is a Bubble But Isn’t a Toy
Author: Martin Young Last Updated May 21, 2021
Speaking to CNN Business in an exclusive interview, Ethereum co-founder Vitalik Buterin aired his views on the market crash and current state of the crypto industry.
Buterin, who has had a sizeable chunk of his personal wealth wiped out over the past week, told CNN that he is not concerned about the market crash stating that we have had several of them before.
He likened the current situation to a bubble stating that knowing when they will pop is “notoriously hard to predict.” “It could have ended already,” he added before continuing to suggest that “It could end months from now.”
“We’ve had at least three of these big crypto bubbles so far. And often enough, the reason the bubbles end up stopping is because some event happens that just makes it clear that the technology isn’t there yet.”
Buterin’s Ethereum address currently holds 325,000 ETH worth an estimated $895 million at current prices. This is 35% down from its peak value of $1.4 billion on May 12.
Crypto is Not a Toy
Comparing the current scene with that during the last ‘bubble’ four years ago, Buterin stated:
“It feels like crypto is close to ready for the mainstream in a way that it wasn’t even four years ago. Crypto isn’t just a toy anymore.”
The narrative has been different for Ethereum this time around, with large institutional players entering the scene and pushing up prices. Although, some industry observers are blaming highly leveraged trading on derivatives exchanges for the latest market downturn.
Buterin added that although he’s not sure, there is a “possibility” that Ethereum eventually catches up and surpasses Bitcoin in market value. At the time of writing, the Ethereum market capitalization was $318 billion – 42.5% of Bitcoin’s market cap.
Regarding the ‘Elon effect,’ the Ethereum mastermind stated that it is something new to the scene, and his influence will eventually diminish.
“Elon Musk tweeting is something that the crypto space has only been introduced to for the first time literally last year and this year. I think it’s reasonable to expect a bit of craziness. But I do think that the markets will learn. Elon is not going to have this influence forever.”
Regarding his continued Dogecoin shilling, Buterin added, “I don’t think that Elon has a kind of malevolent intent in any of this.”
Ethereum Price Recovers
At the time of press, Ethereum had recovered 9% on the day to trade at $2,775. Prices touched $3K in late trading on Thursday but were unable to break resistance there, falling back below $2,700 before Friday morning’s recovery. ETH bottomed out at $2,350 during this correction.
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