Merrill Lynch draws Bitcoin to achieve global legitimacy


nnnComment: Commentary: Merrill Lynch’s merchandise and derivatives strategist Francisco Blanch has released a report on Bitcoin, combining the history of money development with the possibility of a bit currency becoming a currency, analyzing its advantages, pointing out that if Bitcoin can To solve some problems, will be expected to achieve global legitimacy.n
nnTranslated by: Inan
nFrancisco Blanch, a strategist and derivatives strategist at Merrill Lynch, mentions a similarity between digital money and gold in a report on Bitcoin, pointing out that if it’s in terms of safety, liquidity and return Aspects of the problem can be resolved, the evolution of the currency will be a higher level.n
nThe report examines the history of trade goods and the process of causing paper money, and points out that Bitcoin may be the latest achievement of the evolution of money (from salt to banknotes) witnessed.n
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nNeed to be considered collateraln
nBlanch mentions that the first and greatest obstacle to the bitter currency on a legitimate path is that it is to be accepted as an asset and that once it is achieved, it will take a big step towards global legitimacy Then
nBlanch said:n
nn”We do not yet know which major institutions regard digital money as collateral.”n
nnNonetheless, Wall Street still welcomes digital money as a potential investment product.n
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nWorthy of the namen
nBlanch briefed the beginning of the report on the history of goods and their monetary values, indicating that actual demand, innovation and new discoveries contributed to the development of money.n
nSalt “in the ancient need for mining, very valuable.n
nBut the salt and other commodity currencies are often unusable and not durable enough, so the government began to use gold and copper and other metal casting currency.n
nSpain found a huge silver mine in Bolivia, making silver coins dominate in nearly 400 years of trade.n
nCarrying a lot of gold coins and silver coins everywhere is not convenient, so the world in the last 200 years began to turn to the use of paper money.n
nBanknotes cause their prices to fluctuate significantly with the business cycle. Today, most countries’ currencies rely on “absolute trust in issuing governments”, and the central bank will fulfill its obligations to control inflation.n
nSince Bitcoin solves some of the problems faced by paper money, its legalization seems logical, but it also has some problems that need to be addressed.n
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nsafety n
nSafety has always been a pain in the currency and the digital currency, and Blanch has noticed that.n
nHe said:n
nn”The lack of a central decision-making process or authority creates a risk that exists, such as currency bifurcation, and the risk of hacking, identity theft, or fraud is a recurring problem.”n
nnHowever, in terms of volatility (another feature of Bitcoin), Bitcoin is better than silver in a few cases.n
nBlank said: “Compared with the euro, yen and even gold, Bitco currency volatility is very high, but last year, its volatility was twice lower than the silver, the latter in the world as a currency for up to 400 years “n
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nfluidity n
nBitcoin is actually a marginal asset, and its performance in the market liquidity is naturally lost to stocks, traditional currencies and fixed income, but the bit currency trading volume is difficult to ignore.n
nBlanch said:n
nn”It is difficult to ignore the sharp rise in the volume of major foreign currency currencies such as Bitcoin and Taishu in recent years, and since 2012, the daily trading volume of Bitcoin has increased fivefold to $ 2 billion a day.”n
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nReturnn
nOne aspect of Bitcoin’s advantage is the return, its value has doubled this year, and its competitors in the field (such as the ether square) has grown by more than 1000%.n
nHowever, Blanch believes that the value of Bitcoin is so high because it is difficult to mine.n
nBlanch put forward a simple hypothesis that this might promote its development:n
nn”With the advent of quantum computers, or developers agree to adopt a simpler protocol, the status quo may change.”n
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nIs really digital goldn
nWith the increase in the difficulty of mining and people’s interest in the growth of special currency, Bitcoin has entered a similar gold model, and to achieve this price rise time is much shorter.n
nBlanch concludes:n
nn”While it is not certain how this trend of gold is sustainable and there is no way to predict it, the return on digital money depends largely on the confidence of individuals, companies and financial institutions in this emerging technology.”n

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