Why is Bitcoin not used as money yet? The note for clients from the Union Bank of Switzerland states that the leading cryptocurrency ” is still too unstable and limited.”
3 August, AtoZ Markets – The Union Bank of Switzerland, one of the Swiss-based investment banks, has stated that the stability and volatility of Bitcoin are too high now for the leading cryptocurrency to be used as “money.”
UBS: Why is Bitcoin not used as money yet?
The bank has issued a note to its clients, where it stated that until stable regulatory practices will be in place and some technical complexities are resolved, Bitcoin could not become a “legitimate asset class.” UBS strategist Joni Teves stated in the note:
“Bitcoin is still too unstable and limited to become a viable means of payment or a mainstream asset class. Owing to its lack of price stability, bitcoin falls short of criteria that need to be satisfied to be considered money.”
The cryptocurrency-pioneer has been gaining a lot of popularity from institutional investors since its comeback in July. That time, the prices of Bitcoin has been climbing back to above $8,000. Many of investors have been anticipating an uptrend in Bitcoin adoption in the upcoming half of the year.
In fact, another highly-expected event for the next 2018 semester is the approval of the Bitcoin exchange-traded fund (ETF) from the US regulator. This is considered to be one of the key drivers that have the potential to push the price of Bitcoin higher.
Bitcoin would need to hit $213,000 to replace the US money supply
UBS has initially adopted a bearish stance on cryptocurrency – back in May, it decided not to offer any cryptocurrency-related products to its clients.
Mr. Teves has been analyzing the historical data on Bitcoin, with the key takeaway being the statement that Bitcoin cannot “handle the volume of transactions processed by mechanisms being used in the real world.”
Earlier this week, the UBS has stated in a report that Bitcoin would need to hit a $213,000 in order to replace the US money supply.
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