German banking giant Deutsche Bank says it expects bitcoin to remain “ultra-volatile” due to its limited tradability, adding that just a few large purchases or market exits could significantly impact the cryptocurrency’s supply-demand equilibrium. In a recent report, the bank’s research team pointed to bitcoin’s illiquidity – which features a set 21 million supply – as an obstacle.
89% of bitcoins in total circulation have been mined.
Currently, around 18.7 million or 89% of bitcoins in total circulation have already been mined. That expected year for all bitcoins to be mined is 2140, roughly a century from now. “As an investment asset, bitcoin liquidity remains low,” the report noted. “Last year, 28 million bitcoins changed hands (150% of total bitcoins in circulation), compared to 40 shares of Apple (270% of its total shares in circulation).” The heart of the comparison between bitcoin – often referred to as digital gold – and gold boils down to the supply angle, in which both are limited, the report said. One major marginal driver of the price, therefore, becomes the demand.
Bitcoin continues to trade around $58,000.
“Bitcoin’s market cap of $1 trillion makes it too important to ignore,” the Deutsche Bank report said. “Some people think bitcoin is a commodity. Others think it is a currency. A few think it is a stock. Nevertheless, its market cap is among the top 10, both as a currency and as a stock.” The leading cryptocurrency has seen its price skyrocket 600% in the last year amid divided opinion on whether it is in a speculative bubble waiting to burst or an asset that’s here to stay. Bitcoin hit a $1 trillion market value yet again this month and reached a new peak above the $60,000-level, after an already-robust February.