Bitcoin as a Nich Asset: ING Bank Analyst’s View

As the leading bank analyst mentioned, bitcoin will retreat from its bottom to become a niche asset.

After launching bitcoin futures, the price reached to $20,000 mark. Due to this principle economist at ING Teunis Brosens warned that the current high valuations are “based on shaky foundations”.

“Nobody can forecast the future, but our current thinking is this: one day, beyond the hype, bitcoin will return to being the thriving niche product that it was in its initial years,” he said.

When considering the value of bitcoin, Brosens said that it could be worth zero if interest wanes because nothing is backing it, or, it could be worth the equivalent of $1.7m today if it were to eventually replace all narrow money, signalling is unknown quantity.

He said there are several things that keep it from becoming international currency, such as lack of intermediary, scalability, volatility and energy use.

“Bitcoin proponents argue that volatility will fall as Bitcoin adoption increases. That may be the case. Yet bitcoin remains money with fixed supply, lacking a central bank to manage price stability,” he said.

“These are a number of serious impediments that are likely to prevent bitcoin from becoming a serious mainstream contender to existing payment systems in the short to medium term – at least in developed economies which have highly efficient and low-cost systems in place. In economies where payment systems are less well developed, bitcoin has more potential.”