“Deutsche Bank share slide fuels global banking fears”

The recent decline in Deutsche Bank’s share price has reignited concerns about the state of the global banking system and the possibility of a new financial crisis. As we have seen in the past, major commercial banks are deemed too big to fail, and governments will often bail them out to prevent widespread economic collapse. However, the mounting debt levels of the U.S. government and other countries are raising concerns that this time, the situation may be different.

While politicians may kick the can down the road when it comes to addressing unsustainable debt levels, the market is starting to feel the effects of this issue. The yo-yoing between interest rate hikes and quantitative easing programs by central banks is not designed to solve the systemic issue of government expenditure exceeding income. Instead, the Federal Reserve and U.S. Treasury are working to protect the dollar’s position as the global world reserve currency. This short-term solution may have long-term consequences, including the threat of hyperinflation.

As a result of these economic concerns, some investors are turning to alternative investments such as Bitcoin. The cryptocurrency has often been touted as a potential hedge against inflation due to its limited supply and decentralized nature. Despite criticism from some commentators, the recent rise in Bitcoin’s price suggests that the inflation hedge thesis may be back in play.

However, the relationship between Bitcoin and inflation is complex and difficult to predict. In 2021 and early 2022, inflation was on the rise, and Bitcoin’s price fell, leading many to dismiss the idea that Bitcoin could be an inflation hedge. But some members of the Bitcoin community, such as Steven Lubka, continued to hold this conviction. They argued that the inflation was due to systemic supply chain shocks caused by the pandemic and not monetary inflation. Therefore, the idea that Bitcoin could act as a lifeboat amid the devaluing of the U.S. dollar could still hold true.

Bitcoin’s price decline in the past was also partly due to the unwinding of fraud and leverage from certain players in the cryptocurrency market. As the market continues to mature, the value of Bitcoin as a hard money asset may become more apparent to investors.

In conclusion, the recent decline in Deutsche Bank’s share price highlights the fragility of the global banking system and the potential for a new financial crisis. While politicians and central banks may try to kick the can down the road, the mounting debt levels of governments and the threat of hyperinflation suggest that a historic economic correction may be looming. Some investors are turning to Bitcoin as a potential hedge against these risks, but the relationship between the cryptocurrency and inflation remains complex and difficult to predict.


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Bitcoin Can Become The 21st Century Digital Gold, Says Deutsche Bank’s Macro Strategist

Marion Laboure – Macro Strategist at Deutsche Bank – believes bitcoin has the potential to become the “digital gold” of this century. However, she expects the cryptocurrency’s price to be “ultra-volatile” in the next few years.

Laboure also praised Ethereum’s use cases, labeling the asset as the “digital silver.”

BTC – The Gold of The Future

According to Marion Laboure – Analyst and Macro Strategist at Deutsche Bank – Bitcoin possesses all the necessary qualities to step in when the world suffers from rising inflation, doubt, and fear due to the COVID-19 pandemic and the governments’ actions. As its supply is fixed (there will be no more than 21 million BTCs in existence), she stated that the asset could be a successful choice as a protection against the growing inflation.

The increased control by authorities over the population could be another factor that would make bitcoin attractive to the people. Laboure reminded that in such cases, throughout the years, humankind has turned towards assets that were not under the governments’ jurisdiction, such as gold. With that said, the executive believes BTC could become the “21st-century digital gold.”

It is worth noting that Deutsche Bank had a different opinion on the matter in the recent past. Last year, a report from the German multinational investment bank stated that bitcoin’s high volatility is an obstacle that makes the digital asset not a “reliable source of value.”


According to Laboure, though, BTC’s enhanced fluctuations would not last forever. The asset remains “risky” as of the moment and could be “ultra-volatile in the foreseeable future” but just like gold, which has also experienced this issue, BTC would eventually overcome it.

While bitcoin is the pioneer in the crypto space and the largest digital asset by market capitalization, Laboure also praised Ethereum’s merits. She pointed out that it is more than a cryptocurrency as it offers many applications and use cases such as decentralized finance (DeFi) projects.

In fact, most of the trendy non-fungible tokens (NFTs) are part of the Ethereum blockchain and she noted ETH could be the “digital silver.”

Laboure concluded that no other cryptocurrency would become stronger than Bitcoin or Ethereum in the next five years.

Marion Laboure
Marion Laboure, Source: Deutsche Bank

Crypto’s Obstacles

Deutsche Bank’s strategist also spoke about the disadvantages of the cryptocurrency space with lack of regulation being the main one. She sees the industry much more settled once this issue gets solved. The environmental concerns that crypto mining causes are the other big hurdle:

“In one year, Bitcoin uses around the same electricity as the entire population of Pakistan (c.217M people),” she reminded.

This has been a growing concern this year, but the number of companies and parties aiming to solve it has increased exponentially as well. For instance, several leading cryptocurrency exchanges have already launched initiatives that would make them carbon neutral, including FTX, BitMEX, and Gemini.

CBDCs, Cash, And Crypto

Laboure also gave her two cents about central bank digital currencies. She prefers decentralized cryptocurrencies saying that the centralized nature of the CBDCs would not be attractive to society. In any case, she believes both assets together with cash would successfully co-exist in the economic network.

On another note, Deutsche Bank’s CIO, Christian Nolting, opined somewhat differently on the matter. Back in May, he said that the impending launch of CBDCs would be a major threat to bitcoin in terms of serving as a currency:

“A widespread introduction of CBDCs accompanied by higher regulation of cryptocurrencies could create a more challenging environment for crypto assets as some of their advantages compared to traditional financial assets would fade in the longer term.”


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Deutsche Bank analyst: Bitcoin will be ‘ultra-volatile,’ but it’s here to stay

Marion Laboure, an analyst at Deutsche Bank’s research division, said she can envision Bitcoin taking the role of digital gold in the future: lasting for centuries and largely not controlled by the government.

In an update to Deutsche Bank’s website on “what’s next” for the largest banking institution in Germany, Laboure said she could “potentially see Bitcoin to become the 21st century digital gold,” but warned investors against the crypto asset’s volatility. According to the analyst, most Bitcoin (BTC) purchases are made for investments and speculation rather than keeping the coins for a medium of exchange. 

“Just a few additional large purchases or market exits can significantly impact the supply-demand equilibrium,” said Laboure. “[Bitcoin] is too volatile to be a reliable store of value today. And I expect it to remain ultra-volatile in the foreseeable future.”

Though the Deutsche Bank analyst expressed concern about the lack of regulation over cryptocurrencies as well as their potential impact on the environment, she hinted that Bitcoin would likely remain the dominant digital asset in the crypto space. Ethereum may have more use cases in decentralized finance and with the rise in non-fungible tokens, but Bitcoin still enjoys its “first-mover advantage.”

“If Bitcoin is sometimes called ‘digital gold’, Ethereum would then be the ‘digital silver.’”

Related: Bitcoin ‘pushing aside’ gold as a store of value

Deutsche Bank analysts have previously described Bitcoin as a cryptocurrency “too important to ignore, suggesting that the price of the crypto asset would likely rise with additional asset managers and companies entering the market. In 2019, the financial institution predicted that digital currencies would replace fiat by 2030.