Bitcoin is going to be the world’s sixth largest global reserve currency, a new study has found, as blockchain becomes increasingly important to mainstream lenders.
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Banks will invest at least $1 billion into bitcoin and blockchain projects over the next 12 to 24 months, according to the report.
The survey from the M&A advisors to the technology industry claims to prove the strategic significance of bitcoin and the Blockchain technology underpinning it, calculating that more than a million bitcoin transactions are now taking place daily, in excess of 10 times publicly reported data.
For investors who bought in during bitcoin’s headiest days to date, in early 2014, that’s not enough of a rebound: before the price of the digital currency plummeted in 2014, it reached more than $US1100 a bitcoin. “We believe the value of the bitcoin currency (BTC) will benefit from this trend and therefore are initiating coverage of GBTC with an OUTPERFORM rating and $40 price target”. The initial use of blockchain is typically not to replace core infrastructure, such as wire transfers, but to complement it, often by storing “meta-data” in areas such as settlement and clearing, noted Magister.
That said, Millar accepted that initially banks would likely be unwilling to remove the core infrastructure that handles the process of clearance and settlement.
He added: “Blockchain technology will underpin a growing number of routine transactions globally as trust grows. Growing vendor acceptance and the adoption of Bitcoin in developing markets are creating a pincer movement that will lead to widespread business and consumer acceptance and adoption over time”, he said.
Elsewhere, Wedbush left most of its more forward-looking projections on the share of the online payments, remittance, banking services and microtransactions markets it believes bitcoin services will capture unchanged. On the other hand, we estimate that 90% of bitcoin transactions by volume are in fact commercial transactions, typically in developing economies. Jameson Lopp, an engineer at Bitcoin security platform BitGo, told techradar: “Reports indicate that China is leading this rally again, but even those reports can’t be fully trusted because Chinese exchanges have been known to inflate their reported volumes and a few have extremely high volumes due to not charging fees on trades”.
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The report says the actual number of transactions is being “underreported by an order of magnitude” by not factoring in “off-chain transactions”.
