Categories: Bitcoin Business

Bitcoin still has potential to make new highs, experts says

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Prices tumbled 15% from its one month high of $12,575 recently after Trump’s remarks

Dubai: Bitcoin prices may recover and see new highs.

Bitcoin prices tumbled 15 per cent from its one month high of $12,575 (Dh46,150) recently after US president Donald Trump said he is not a fan of the cryptocurrency and its “value is highly volatile and based on thin air.”

In 2017, the parabolic rise in Bitcoin prices was speculative in nature, more do with the Fear Of Missing Out syndrome, but in 2019, fundamental factors such as trade wars triggered by the United States on China, Mexico, Canada and India along with potential launch Bitcoin futures on US bourses are impacting the prices.

Bitcoin prices are rising at a rapid pace, similar to its initial rally that happened in 2017 and that matured in prices of the cryptocurrency hitting $20,000 (Dh73,454) in December of that year.

But according to analysts, Bitcoin still has potential to make new highs.

Fiorenzo Manganiello

“There is a major key factor that will dominate Bitcoin’s future: the acceptance of central banks and financial institution as a store of value. With the upcoming halvings, central banks have the opportunity to build their own digital currency reserves and to ideally create freshly-mined Bitcoin that would have a premium value. For this reason prices could surge and reach new highs,” Geneva Business School blockchain professor Fiorenzo Manganiello told Gulf News.

The central banks in the UAE and Saudi Arabia have undertaken a joint project with Saudi Arabian Monetary Authority (Sama) to use block-chain technology in order to issue a digital currency accepted in cross-border transactions between the two countries.

“I believe that this is the best way to implement and identify concrete blockchain applications. Testing the technology on “a government to government” level protect the customers from the risks of cybersecurity and scam and certainly help in the definition of a regulatory framework. Both countries will better understand how to improve the management of cross border payments, one of the most complex banking activities. Saudi Arabia and UAE will also use the technology to process the clearing and settlement of payments and to reduce counterparty risk,” Manganiello said.

The UAE Central Bank previously did not endorse digital currencies such as bitcoin because of its speculative nature and risks involved. Saudi Arabia also warned against trading bitcoin because it was outside the bank’s regulatory reach.

Big opportunity in Gulf region

According to Manganiello, digital banks have an incredible opportunity in the Gulf region thanks to the combination of three crucial factors: a very high smartphone penetration rate, a young population and a fast adoption of digital solutions.

According to McKinsey, at least 80 per cent of Gulf consumers prefer to perform their banking operations through computers and smartphones and only rarely visit branches to meet specific and more complex needs.

“The advantage of digital banks relies on two major differentiation factors: the first one is the ability to empower customers with an ecosystem of services such as dedicated digital concierges, access to airport lounges and the integration of insurance and trading functionalities. In addition, the majority of customers is looking for attractive loyalty programmes and discount coupons,” he said.

That’s clearly the strategy of Liv., Emirates NBD’s digital bank that recently announced the launch of Olivia, a conversational chatbot that helps customers better manage their finances. Liv. today is the fastest growing bank in the UAE acquiring over 10,000 new customers every month, he added.

Dubai: Bitcoin prices may recover and see new highs.

Bitcoin prices tumbled 15 per cent from its […]


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