This was one comment that seems at first sight very bullish for the bitcoin, the most famous digital currency. Mario Draghi, in his statement to the European Parliament’s Committee on Economic and Monetary Affairs has mentioned that the European Central Bank does not have the mandate to prohibit or regulate Bitcoin.
It is clear that big institutions are not in a hurry to regulate. We believe that the power of money creation is one very important power that is not going to be given up. Ironically, new derivatives are going to be introduced by next year on the Bitcoin and should, by the way, likely weigh on prices. The gold price has been driven lower by paper contracts. The ratio between paper and physical is currently higher than 200 according to the latest disclosure from the CME. One can perfectly imagine what impact it may trigger when derivatives are going to be introduced on Bitcoin.
Right now, the Bitcoin price is holding slightly below $4000 and there are upside pressures. The price is likely to rise again. We do not consider that this is a “tulip mania” the bubble name of the hyperinflation that occurred in Netherlands. It is rather another way to store wealth.