As of today, Bitcoin(BTC) is trading flat at $19,210, a far-cry from its all-time high of $69000 last November.
Since then, BTC has continued to be in free fall with the crypto market experiencing a nearly $2 trillion crash this year. After an intense crackdown on cryptocurrency, China sounded warning bells that bitcoin could be headed to zero.
Amid such gloomy predictions, Deutsche Bank has released a bullish report on the world’s largest digital currency.
The Deutsche Bank strategists have predicted that Bitcoin will reach $28000 by the end of 2022. They have based it on the continued correlation with the performance of benchmarks such as Nasdaq100 and S&P500.
One of the analysts had earlier described bitcoin as the 21st century gold but in this report, the virtual currency was likened to digital diamonds rather than digital gold.
The analysts suggested that bitcoin is more comparable with diamonds which were heavily marketed and built into a $72 billion dollar a year industry. Gold on the other hand has remained stable while BTC has underperformed stocks, bonds and faced the pressure on prices due to removal of excess liquidity by major banks.
The analysts attributed the lack of common valuation models in the crypto-market like those present in public equity system, as the reason for difficulty in price stabilization.
The report concluded that BTC could recover to $28000 but warned that the free fall could continue due to high complexities in the system along with the fragmented market.