Despite worries about persistent market volatility, bitcoin remains an unprecedented opportunity due to its ability to conduct uninterrupted trading without requiring a central counterparty for clearing, according to DBS.
2022 has been a difficult year for cryptocurrency markets which saw more than $1 trillion in value wiped out. Security issues have also been spotlighted with expectations of a record year for crypto theft with $3 billion stolen thus far, according to Chainalysis.
But within this vast universe of coins that will result in varying outcomes, one cryptocurrency stands out as an unprecedented opportunity in history, according to DBS.
«I think bitcoin is still unique whether the price changes or not,» says DBS investment strategist Daryl Ho in a recent media briefing attended by finews.asia. «If we just look purely on a price basis, you will see a lot of volatility and that doesn’t inform you a lot about what benefits it actually brings.»
Free Market Access
According to Ho, the uniqueness behind bitcoin is not driven by its price but rather by its utility which allows you to transfer value in a decentralized manner without the need for a central counterparty to clear the trade.
«If you were holding onto certain rationed assets as the start of February, you may not have been able to liquidate them at will because sometimes, exchanges were closed,» he explained. «But the bitcoin market was open 24/7. So there was an avenue for you to raise cash and liquidity, if necessary. Before bitcoin, there has never been any avenue that could do this.»
Crypto Business
Proof of its confidence in select cryptocurrencies, DBS has been gradually developing its business in the asset class, particularly through its digital asset exchange DDEx which saw trading rebound in June this year to double volumes in April. More recently, the bank also extended access beyond institutional, family office and private banking clients to include its mass affluent segments.
«Most of the methods by which you trade assets require a central clearing party to verify the trade. So, it is still an opportunity that fiat money cannot buy because fiat monetary systems are still governed by central banks,» Ho said, underlining bitcoin’s 13-year track record as an additional confidence booster.
