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One would be hard-pressed to recall a comparable asset in financial history where valuation estimates were as vast as Bitcoin’s has been – ranging from nothing at all to the lofty millions of dollars. Strategists at DBS Bank bring various considerations for both bulls and bears of Bitcoin while keeping in mind the boundless realm of possible outcomes.  

See:

 

  • Three opportunities that Bitcoin brings – DBS Bank
  • Bitcoin: Three possible roadblocks to widespread adoption – DBS Bank

Is Bitcoin just another manic bubble, or the start of a new monetary revolution?

“To the bears, it is worth considering that Bitcoin’s blockchain technology is indeed revolutionising finance as we speak, while characteristics of decentralisation, security, limited supply, and digital nature render it unique properties that are near impossible to find substitutes for. To the bulls, the future is still rife with uncertainty with Bitcoin’s scalability, volatility, regulatory, and geopolitical risks all serving as roadblocks to widespread adoption.”

“As with most new technologies, investor enthusiasm can be a large factor in asset bubble formation. This certainly does not mean that the underlying technologies do not have value. There is often a wide gap between the value of an idea and the investors’ ability to capture that value. While the idea of Bitcoin is revolutionary with a ‘first mover advantage’, one would also recall that the first web browser or search engine are no longer in existence.”

“As rational investors, it is consistent then from a standpoint of diversification to allocate funds to Bitcoin, with full mental acceptance that losing these funds would be well within the realm of possible outcomes. Yet should valuations only rise skyward from here, the investor can stand with pride to say that they were right there when it began, playing their part in ushering in the dawn of the monetary revolution. That, we suspect, is an opportunity that (fiat) money cannot buy.”

 

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