Cryptocurrency investors could lose everything, warns Deutsche Bank www.rt.com
Bitcoin investors should remember issues like high volatility, possible price manipulation and data loss or data theft, according to Markus Mueller, global head of the Chief Investment Office at Deutsche Asset Management.
In an interview with Bloomberg, he said that Deutsche Bank does not advise investing in cryptocurrencies at present. “We do not recommend that. It’s only for investors who invest speculatively,” Mueller said, adding: “There is a realistic risk of total loss.”
According to him, recent price increases reflect a lot of imagination, driven by the current situation in the market. There is hardly any return scope left in other asset classes such as fixed income.
More regulation, security and transparency is required in order to establish cryptocurrencies as some kind of asset class in the future, Mueller believes.
“Important issues such as liability and documentation are unclear. We are still at the very beginning.”
Companies that issue cryptocurrencies should work together with regulators, according to the banker. “When security and trust are created, cryptocurrencies can be assessed like established asset classes. It is possible that the governance required will exist in five to 10 years from now,” he said.
Mueller stated that he did not understand why so many followers of cryptocurrencies see something negative in regulation, which protects against abuse and crime.
Traditional money is supported by the underlying economic power of a country, according to the investment chief, and gold is a bit more abstract but is at least of a “physical nature.” Cryptocurrencies would only function as a store of value if the issuing companies had a sustainable business model, he said.
Published Date:2018-01-29