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Banks Get Closer to Bitcoin Despite its Recent Performance

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Bank buildings in the skyline of a city with banks such as HSBC or JPMorgan Credit Suisse

Banks from all over the world are starting to get closer to Bitcoin (BTC) despite the recent price performance experienced by the largest virtual currency in the world. DBS, one of the largest banks in Singapore, considers that Bitcoin could work as a better store of value (SOV) than the U.S. dollar (USD). Furthermore, Goldman Sachs released a new report in which they explain that cryptocurrencies could be a new asset class. 

Banks Change Their Stance on Bitcoin

For DBS, it might be possible for Bitcoin to become a store of value. In a recent note that has been shared with investors, the Chief Investment Officer at DBS shared his views on the most popular virtual currency in the world. One of the topics discussed was how central banks continue to add print large amounts of money and the negative effects that this has on the economy.

Let’s use as an example the way in which the cryptocurrency pandemic was handled. Governments all over the world decided to close their populations through lockdowns and print money. The printed money was then shared with the population in different ways. In the U.S. it was a direct transfer to individuals. In other countries, there were other programs. The common answer was to print more money and debase their value. 

The evaluation made by DBS reads as follows:

“Indeed, the exponential rise in Bitcoin prices are rivalled only by the meteoric expansion in the balance sheets of the largest global central banks around the world – the US Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BOJ), as well as the People’s Bank of China (PBOC).”

Furthermore, the two main characteristics of Bitcoin include being a decentralized currency with a limited supply. The network is not controlled by any central authority and there are only 21 million BTC in the world. 

At the same time, Goldman Sachs released a new report in which they analyse cryptocurrencies as a new asset class. They go through how digital assets expanded over the last years and touched some of the most important points about the crypto market. 

Moreover, they have also shared how different digital assets such as Ether (ETH), Litecoin (LTC) or XRP expanded over the last year and reach massively high valuations in some cases. The report seems to analyse digital assets compared to other markets and how they outperform other assets. 

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