Bitcoin’s [BTC] next rally will be fueled by Central Banks stockpiling ‘digital gold’

click here to see original post

With the crypto-winter ravaging the collective virtual currency market, proponents are looking everywhere for an escape. From institutional investors venturing into the market to increased mainstream adoption to lax government regulations, several indicators for the departure of winter and arrival of spring have been suggested.

One researcher has opined that the solution could be the apex banks that the cryptocurrency industry is waging to replace.

Central Banks, often at loggerheads with the decentralized currency industry, could trigger the crypto-spring, according to a researcher at the London School of Economics [LSE]. Dr. Garrick Hileman, the head of research at Blockchain.com and research associate with the LSE, stated that central banks stockpiling Bitcoin could result in the coin rising in price.

Speaking to Oliver Smith and David Stevenson for the AltFi podcast Crypto for Earthlings, he detailed the rise of Bitcoin from the initial whitepaper and the various highs and lows of the cryptocurrency market.

The Blockchain.com researcher who veered into the crypto-space back in 2011 admitted that Bitcoin has lost its dominance, but still maintains “outside importance” due to its wide adoption and liquidity within the market.

Hileman cited the correlation between increased regulation on the virtual currency market with the rise of Bitcoin’s price. He added regulation “has helped legitimize Bitcoin” and that regulators do not wish to “ban Bitcoins and other cryptocurrencies”.

The researcher supported his stance by citing the example of law enforcement auctioning Bitcoin following the Silk Road debacle, adding that:

“Law enforcement typically does not auction off cocaine, for example, that it seizes. So, that’s a pretty strong endorsement.”

Despite the claim from BTC proponents that the digital currency was designed to mirror money as a transfer of wealth and store of value, Hileman only contended with the latter use. The term “digital asset” has been used for Bitcoin to refer to its “main use” being a store of value, according to the researcher.

Given this claim of Bitcoin being “digital gold” and its main function being that of a store of value, Heilman mulls the prospect of large players acquiring the asset. In his opinion, central banks could begin stockpiling the cryptocurrency, which would lead to a surge in its price.

Heilman stated:

“The question is though, who will be buying digital gold? If central banks start to accumulate bitcoin, that could be hugely impactful on bitcoin’s price.”

Central Banks as a catalyst to a virtual currency bull-run might not be far from reality. Pauline Adam Kalfon, a blockchain and financial services partner with PwC France, stated that central banks would initially move away from cryptocurrencies leaving it to the corporations like Facebook and JP Morgan. However, she added, that after being “battle-tested” by corporations, a central bank cryptocurrency could be a possibility.

Regulatory authorities’ also have a positive outlook on the crypto-space. Earlier this month, Valerie Szczepanik, the digital assets advisor with the US Securities and Exchange Commission [SEC], stated that the crypto-spring, marking a surge in the coin’s prices, was around the corner.

Some central banks do not share this favorable view of cryptocurrencies. The European Central Bank, in a March 12 twitter campaign, stated that Bitcoin is not money, while ironically admitting that the creation of new money and devaluation of held currency was not of concern.


Follow us on Telegram | Twitter | Facebook


Don’t Miss

Stellar silently patched a bug that allowed a user to ‘create’ 2.25 million XLM worth $10 million

Graduate of Finance and Economics, interested in the intersection of the world of decentralized currency and global governance.

Share !