Deutsche’s Bank Macro Strategist for Thematic Research Marion Laboure has tipped Bitcoin to replace digital gold at some point.
Laboure, who doubles as a lecturer at Havard expressed her support, saying she could “potentially see Bitcoin becoming the 21st century digital gold” but also warned investors about the high-risk volatility rate of cryptocurrencies.
“Just a few additional large purchases or market exits can significantly impact the supply-demand equilibrium,” Laboure said in the question and answer session transcribed on Deutsche’s website.
“But it is important to keep in mind that Bitcoin is risky: it is too volatile to be a reliable store of value today. And I expect it to remain ultra-volatile in the foreseeable future. she continued.
When quizzed on the major disadvantages of bitcoin, Marion Laboure pointed out the lack of regulation of the crypto space and the negative impact on the environment caused by mining.
“As of early 2021, Bitcoin’s annual electricity consumption puts it at the edge of being the equivalent of a top 30 country. For example, in one year, it uses around the same electricity as the entire population of Pakistan (c.217m people)!”
The senior economist however added that she expects most of the regulatory deficiencies to be corrected this year and technological advancement in the industry will help bitcoin become “greener”.
Despite touting bitcoin to replace digital gold, Laboure added that CBDCs, physical cash and cryptocurrencies can all co-exist together and there would be no need for one to replace the other.
Photo Credit: Deutsche Bank Research | Istock