Deutsche Bank’s Recent Research Believes Bitcoin will be over $110,000 in Five Years for Number of Reasons

The global cryptocurrency market cap rose above $2 trillion early on Tuesday, March 22, driven by a well-anticipated surge in buying activity across major exchanges based on rapidly escalating geopolitical and inflationary issues. According to CNBC, Federal Reserve Chairman Jerome Powell on Monday vowed tough action on inflation, which he said jeopardizes an “otherwise strong economic recovery” (many Americans freshly filed for unemployment benefits though). “The labor market is very strong, and inflation is much too high,” Jerome Powell said in prepared remarks for the National Association for Business Economics.

Overnight Bitcoin (BTCUSD) surged above $42,340, gaining 3.4%. Ethereum (ETHUSD)gained 5.6% over the same period and was trading above $3,005 at the time of writing.

The much-talked-about new coin star Ethereum Classic (ETCUSD) led altcoins in terms of daily gains, rallying 14.77% to $43.27. ETC has gained almost 70% over the past week. Avalanche (AVAX), Solana (SOL), Cardano (ADA), and Polkadot (DOT) all gained 4.33%, 4.90%, 7.38%, and 6.25% respectively in the last 24 hours.

Despite the U.S. Federal Reserve and seemingly Bank of England vowing to ramp up monetary austerity to curb the unleashing 70s-style inflation, their efforts may fall short of expectations, because of the escalated geopolitical issues. They point to a prolonged period of high energy and grain prices since Russia and Ukraine play crucial roles in exports and distributions of both. There is no way to substitute the deficiencies – at least in the short run, therefore, it’s beyond the world’s most powerful monetary authorities to stem these issues efficiently. Hence inflation-proof havens where Bitcoin plays a special role became now top investment considerations.

Moreover, the increasing Bitcoin adoption rate owes a lot to a tectonic shift in the world’s geopolitical security concept. There are emerging discriminations – those kinds that seemed impossible just a decade ago – entailing episodical intolerance to various ethnic origins (think Chinese back in late Trump’s presidency), religion (exodus of the U.S. troops from Afghanistan), and, finally, certain nationalities (Russia-Ukraine war). Other, unaffected so far, nations can no longer peacefully contemplate how sovereign fiat currencies – preemptively, the U.S. dollar – get more and more politically weaponized enforcing various restrictions and sanctions, which pose certain questions as to whether they unconditionally guarantee payments and transfers. This notion boosts the worldwide usage of Bitcoin and, arguably, stablecoins.

Although it’s been a rocky start to the year for Bitcoin, its outlook has been steadily improving over the course of recent weeks when geopolitical turmoil began sprawling — which, as it was above outlined, doesn’t look as pure coincidence. Bitcoin’s price has been hovering around $40,000 in recent weeks but has seen several surges like one following the Federal Reserve’s announcement last week raising interest rates for the first time in three years, and before that, after U.S. President Joe Biden’s new executive order on cryptocurrency. As we already mentioned in one of our previous pieces, the order directed U.S. government agencies to coordinate on a strategy to regulate cryptocurrencies, and, without the wrongly expected accompanying restrictive moves, experts say, it could bring more stability to the crypto market in the long term. A recent study by Deutsche Bank found that about a quarter of Bitcoin investors believe Bitcoin prices will be over $110,000 in five years.