Deutsche Bank, one of the largest and most notorious banks in the world, believes there may be more pain ahead for crypto investors. In a report published by the bank yesterday, it is stated that due to the enormous complexity of the crypto industry, it is extremely difficult to determine the prices of cryptocurrencies to stabilize.
Is Another Crypto Crash Coming?
Deutsche Bank states that there are no “common valuation models such as those within the government shareholding regime” within the crypto industry, that reports CoinDesk† In addition, the crypto market is very fragmented. These matters combined create a very complex situation which, according to Deutsche Bank, could mean that we have not yet seen a bottom for the time being.
Also, cryptocurrencies like bitcoin (BTC) high risk assets according to the bank. This means that cryptocurrencies have been hit disproportionately hard by the recent measures taken by central banks in the United States, among others. The central bank there, the Federal Reserve, does not appear to be finished with the measures for the time being.
In Europe, the ECB has not even really given the go-ahead for possible measures. All these things are anything but positive for the crypto market, according to Deutsche Bank. The report even indicates that there is a possibility that contagionor contamination, within the Decentralized Finance (DeFi) sector can take place.
Bitcoin price forecast from Deutsche Bank
The bank also predicts that a recession will start in 2023 in the United States. Inflation will also end at an astronomical 9.1%, according to Deutsche Bank’s forecast. Bitcoin and other cryptocurrencies will not perform particularly well during such a period unless bitcoin suddenly turns into ‘digital oil’. Not a good prospect, if we are to believe Deutsche Bank.
Because bitcoin is also so closely correlated with the stock market, the bank predicts that the price of bitcoin could reach a maximum price of $28,000 in 2022. Although that is considerably higher than the current price, that is of course not necessarily something to write home about.
