Deutsche Bank Crisis And Bitcoin
By Lamium on Altcoin Academy
Deutsche Bank has been all over the press lately as the company announced the cutting of 18000 jobs during 2019. Deutsche Bank has not yet given details on which offices will suffer most from downsizing. The bank has said its workforce will shrink to roughly 74,000 employees by 2022. The bank said that costs related to the overhaul would push it to a net loss of €2,8 billion ($3.1 billion) for the second quarter.
The current Deutsche Bank crisis clearly showcases the systemic risk within the modern financial and monetary system. Many of the institutions are “too big to fail” and have over-leveraged their positions, partially with help of liberal Keynesian monetary policies.
Deutsche Bank’s Performance
From an investors perspective, $10000 invested in Deutsche Bank 5 years ago is now worth $2000. Deutsche Bank’s (DB or DBK) performance has been horrible throughout the last 5 years. More remarkably the last 5 years have been a season of growth within the global macroeconomy, making the uniquely poor performance even more out of scale.
Deutsche Bank will have little room for error in executing its plans. Its capital levels will “remain stretched” and barely sit above the regulatory minimums in coming years.
Deutsche Bank said that it expected to report a loss for the second quarter of 2,8 billion euros, or $3,1 billion, after subtracting the costs involved in carrying out the plan. Shareholders will not receive a dividend for 2019 and 2020, the bank said.
Bitcoin as a Hedge to Systemic Risk
During the times of increasing uncertainty, bitcoin again secures its position as a hedge to systemic risk. Bitcoin is an antifragile non-correlated asset that provides investors a safe haven during times of uncertainty. Bitcoin is a truly universal asset, available to everyone, everywhere.
Eurozone is facing its own challenges. During the second quarter of 2019, Italy was about to break EU fiscal rules, increasing tensions and derogating trust to EU’s control over its member states even more.
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