Bitcoin continues to make waves even after the cryptocurrency was hit by a $40 million hack in Hong Kong. While the theft grabbed headlines, DBS Bank – one of the world’s largest banks – has announced it is studying how blockchain, the technology underpinning bitcoin, could be used to make the global financial system more efficient and secure. Video: We’re taking the first steps toward understanding how blockchain can be incorporated into our business processes, and how to develop an efficient and secure platform for clients.
Bitcoin is rallying, and DBS says it could be a better store of value than the U.S. dollar. Chinese smartphone manufacturer Xiaomi is adding a cryptocurrency wallet to its Mi App Store. With all the hype around bitcoin, it’s time we have a talk about cryptocurrency. In the article below, Forbes contributor Kadhim Shubber discusses bitcoin, the blockchain, and how we might use cryptocurrencies in our daily lives. Yesterday’s post on the new content I’ll be writing for the next few months got a very positive reception, so I thought it would be a good idea to spend a bit of time explaining the thought process behind the post. This is particularly relevant when writing introductions,
Chinese bank DBS released a report on the crypto space today, highlighting how this young market can change the financial world as we know it. The report notes that “Cryptocurrency is still a very new and unproven technology”. However, the report also reveals that “A global, borderless and permissionless currency, like bitcoin, has the potential to be a better store of value”.. Read more about how much are bitcoins worth and let us know what you think.DBS, Singapore’s largest bank and one of the world’s largest banks measured by assets under management, highlighted bitcoin in a note to customers earlier this week. The bank said investing money in bitcoin is an opportunity that silver [fiat] cannot buy, adding that such investments remain a risky venture and the prospect of losing all the money is among the possibilities.
In a note titled Demystifying Cryptocurrencies, Chief Investment Officer Hou Wei Fook explained that central banks have provided the rocket fuel for the eventual growth of cryptocurrencies, such as the incessant money printing of late, which has helped to further popularize bitcoin among the masses. While the use of technology, an increasingly digitized economy and institutional recognition have all contributed to the rise of bitcoin, at the heart of it all is a long-standing trend of cash devaluation that has affected not only the United States but several other major economies around the world, he wrote. In a report this week, Hou Wei Fook, chief investment officer of DBS, said bitcoin is an opportunity that (fiat) money cannot buy. – Bloqport Insights (@Bloqbot) May 21, 2021 Fook noted that the skyrocketing price of bitcoin rivals the balance sheets of major global central banks, such as the US Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BOJ) and the People’s Bank of China (PBOC). These trends are clearly driving demand for alternative currencies, even unorthodox digital forms that may offer a more accurate store of value than physical dollars, he writes. Devaluation of the currency and the prospect of a sluggish economy are similar stories that have been put forward by various tech and investment firms and billionaires over the past year. Tesla, MicroStrategy, Meitu, a company that produces electric cars, and legendary trader Paul Tudor Jones all decided to invest some of their financial reserves in bitcoin last year. Tesla and MicroStrategy took the crown (together they invested up to $3.5 billion in bitcoin). Image: DBS
Factors for (and against) cryptocurrencies
As for the various factors why bitcoin is better than fiat currencies, DBS said the decentralization of the asset empowers people and the limited amount of $21 million has helped consolidate it as an effective store of value. Bitcoin circumvents this problem because decisions about governance are made by the entire universe of users of the payment system, preventing a group of individuals from changing the rules of the game at will, Fook wrote in a note to customers. Among other things, Fuq noted that bitcoin is more of a cryptocurrency than a commodity, as its high value density increases ease of transfer and its seemingly low correlation with other traditional assets provides diversification benefits to potential investors. Meanwhile, not everything has been smooth sailing in Bitcoinland. Fook said some negative factors, such as low transaction speeds and high price volatility, continue to weigh on bitcoin, as well as the broader problem that the entire cryptocurrency market is in a grey area of regulation.
Gaining an advantage in the crypto asset market
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The Swiss bank claims that bitcoin is a potential refuge for those who want to protect their wealth from inflation and “sudden financial and political events”. The bank explains: “The value of a bitcoin is not tied to a material like gold, rather it is linked to the value that people give it. “In this sense, it is potentially a better store of value than the U.S. dollar because you don’t need the underlying security of a government that can go bankrupt.”. Read more about new cryptocurrency and let us know what you think.
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