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Deutsche Bank 2018 Financial Brief: Bitcoin is the biggest threat to the market next year



Deutsche Bank released the 2018 market briefing. Torsten Slok, the bank's chief international economist, set out in the document 30 threats that could undermine the global market next year. The included terms are bitcoin except North Korea and Brexit. As mentioned in the report, the banking sector is witnessing the revival of this digital currency. While some institutional investors see bitcoin as an opportunity, most see it as a threat.

Bitcoin is above all else

With 100,000 employees and an annual revenue of 35 billion U.S. dollars, Deutsche Bank is a powerful economy in the world. The bank is indeed in dispute (Deutsche Bank was fined $ 425 million for laundering this year and $ 258 million for breach of sanctions in 2015), but it still has considerable influence in the global financial arena. When its chief economist speaks - especially when it comes to threats to the markets, the areas of investment are closely watched.

The 30 major threats to be listed by Torsten Slok in 2018 are worth reading. Selected entries include the United States continued to intensify inflation, Russia's presidential election and the burst of the real estate bubble. One of the more compelling terms is Bitcoin, the economist said: "The bitcoin collapse, affecting retail investor confidence."

Bitcoin crash?

The main concern for Torsten Slok is that in the event of a crash, newcomers to bitcoin trading - that is, institutional investors who trade bitcoin derivatives - are likely to be adversely affected. Bitcoin crashes are not without possibility; just as Slok lists the other entries, this is entirely possible. The inclusion of bitcoin and Russian elections and other global market events in this report demonstrates the rapid growth of Bitcoin. Few believe that in early 2017 Bitcoin will develop into a global threat, not to mention that by the end of the year bitcoin will be treated by financiers.

This Thursday, Deutsche Bank released an article on digital currency on the official website:


We list cryptocurrencies as a dangerous investment because, in part, the reason for its price growth is speculation. Bitcoin is highly volatile and has reached 80% of the price, and the entire realm is not regulated ... The risks that exist can be enormous losses.
Deutsche Bank's briefing did not mention other threats to Bitcoin: This digital currency has won the banking sector's edge. Bitcoin does not mean eliminating all global asset classes. However, investment banks are in a dilemma once they continue their rapid growth. Historically, other stocks, securities or bonds did not perform as well as Bitcoin. In contrast, returns of 6% to 8% on traditional assets seem mundane.

As bitcoin futures are coming online, if bitcoin crashes in 2018, it may result in a partial withdrawal of funds. However, true believers are people who own bitcoin rather than contracts, and their beliefs are not shaken by the sharp price correction. They have gone through a bear market, but still have faith in the digital currency. They do not flee like bankers, they only know to find the next money-making tool.