Saturday, January 18, 2020

Researcher Says Central Banks’ Entrance into the Market Could Fuel Bitcoin’s Next Rally

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Grace Joseph
Freelance Writer, Blogger, and Crypto Enthusiast. Studied Computer Science in University and Undergoing a Masters Degree Programme in Computer Engineering Contact@ reigngracia@gmail.com

Cryptocurrency analysts are relying on Bitcoin’s price chart to ascertain if the crypto-winter is coming to an end, others are relying on the entrance of institutional investors into the market to mean that the crypto-spring is closer than we expect. On the other hand, Garrick Hileman, a researcher at the London School of Economics [LSE] is of the opinion that the entrance of central banks into the cryptocurrency market is what is needed to push the prices of these assets up.

Dr. Garrick Hileman Makes Reference to Bitcoin’s Price Trend Since its Launch

According to a media outlet’s report on March 27, Dr. Garrick Hileman while on the AltFi podcast, Crypto for Earthling made reference to Bitcoin’s hike and dump in price since its launch in 2009. In his opinion, the digital currency has lost its dominance even though it has maintained ‘outside importance’ due to its massive adoption, as well as liquidity within the market.

The researcher further outlined that the entrance of central banks into the virtual currency market could do a lot to impact on market prices. It could also usher in the cryptocurrency spring which everyone is expecting.

Bitcoin is a Digital Gold and Store of Value Can Attract Banks

According to Hileman, given the claims that Bitcoin is “digital gold” and a “store of value” it can attract these banks to the sphere which could spike its price. “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,” he added.

Another angle that was looked at, are regulations targeted at the industry. In this case, Hileman pointed out that these regulations have helped to legitimize Bitcoin. He further gave instances where seized Bitcoins were auctioned by governments. In view of this, the researcher said: “Law enforcement typically does not auction off cocaine, for example, that it seizes. So, that’s a pretty strong endorsement.”

Varying Opinions of the Entrance of Central Banks in the Market

Many may agree with Garrick Hileman’s statements especially when it comes to the area of the central bank also amassing these assets. Nonetheless, some will be quick to point out that it is these institutions Bitcoin was created to avoid in the first place. The banks may not be willing to work with the protocols or rules that have already been set.

The latter can be seen in the launch of JPMorgan’s own cryptocurrency which will serve its customers to carry out transactions but based on the rules set by the company. Reports have also been circulated that Facebook intends to launch a stablecoin and presumably, it will work with a set of rules that of Bitcoin.

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