20 May
A client note from analysts at DB on Bitcoin. Follows the rout in the crypto over the past week or so.
DB says the drop was triggered by a tweet (from Musk) and a China statement.
(For clarity, there were a few statements out of China:
I really should add there is plenty of talk of a campaign that was waged to send the price down, posts on Chinese social media and what have you. Anyway, back to DB’s note)
DB:
- Those few words caused bitcoin’s value to plummet from nearly $60,000 in the days before to below $48,000
- on Tuesday, the PBoC reiterated that it would ban digital tokens as a means of payment, thus causing Bitcoin to plunge just above $30,000 at one point
DB then argues that
- 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
- the value of bitcoin is entirely based on wishful thinking
