Bitcoin is, according to a new report published by Deutsche Bank, now “too important to ignore” given its $1 trillion market capitalization, and its price could keep rising as long as companies and asset managers keep buying BTC.
According to the report, by analyst and Harvard economist Marion Laboure, the real debate is whether bitcoin’s evolution into its own asset class comes from its valuation alone, as the cryptocurrency’s relatively low liquidity and tradability remain an obstacle.
Laboure compared bitcoin to Apple shares, pointing out that 28 million BTC, equivalent to 150% of all the coins in circulation, changed hands last year. In comparison, 40 billion Apple shares, equivalent to 270% of the shares in circulation, were traded.
The price of bitcoin, he said, is impacted by large purchases given its volatility. Its price will nevertheless keep on rising and falling depending on what people believe it’s worth, based on the so-called “Tinkerbell Effect.”
Tinkerbell effect is, according to MarketWatch, an economic term that “describes how something is likelier to happen when more people believe in it.” It’s named after Peter Pan’s claim that the fairy Tinkerbell exists because children believe it does.