The cryptocurrency Bitcoin (BTC) is known for its volatility (price fluctuations). In the past there have always been phases of strong growth, but also phases of sharp price drops. This is exactly why Bitcoin has the image among traditional investors and in the mainstream that it is not a sensible and reputable financial investment. Many are afraid of losing an investment. But a current comparison with the shares of the most well-known financial institution in Germany, Deutsche Bank, shows terrifying results. While Bitcoin was able to recover from the crypto winter this year, Deutsche Bank’s stock continues to rub off and is almost 95% off its all-time high 12 years ago. So how justified is criticism of BTC?
Deutsche Bank with -95% since 2007
A current look at the price of Deutsche Bank shares could make many traditional investors and BTC opponents sweat. After the share reached its all-time high of over € 110 in May 2007, the financial crisis of 2008/09 caused a sharp decline. This continues to this day and there seems to be no end in sight. The stock is currently at € 6.56, which is approximately 95% (!) From its all-time high in 2007. This example shows that even an investment in classic financial products and companies is not a sure-fire success. On the contrary: the same dangers lurk as are often denounced with Bitcoin.
The dangers to the financial system are likely to be significantly higher, since Deutsche Bank is a bank that has a so-called systemic relevance. Not only private customers, but also many companies work with Deutsche Bank. A breakdown or collapse would have far-reaching consequences for our financial system.
The rise of Bitcoin since 2009
Interestingly, what many fear in Bitcoin can also be found in the traditional financial world, only that a possible recovery of Deutsche Bank shares (if at all) will take many years more than with BTC. The Kings Coin, on the other hand, was able to free itself from the crypto winter this year and is currently “only” just under 64% away from its all-time high of around USD 20,000 in 2017.
At the same time, a comparison of Bitcoin with the decline in Deutsche Bank shares shows an interesting antisymmetry. While the “digital gold” has gained massively in value in the past 10 years (despite the current distance from the all-time high), the price of the Deutsche Bank share crashed by the 95% described above.
So the question arises as to how justified the criticism of volatility and investment risk in Bitcoin is if there is the same extent with classic stocks. Of course, the strong price fluctuations at BTC cannot be dismissed out of hand. So far, however, the asset has repeatedly recovered from its 80-90% setbacks and clearly outperforms Deutsche Bank shares in a 10-year comparison.