UBS Calls Bitcoin Price a ‘Speculative Bubble’
By Josiah Wilmoth
Investment banking giant UBS called the year-to-date bitcoin price surge a “speculative bubble”, arguing that bitcoin will not be able to become a mainstream currency.
UBS: Bitcoin Price a ‘Speculative Bubble’
The investment bank made this claim in a whitepaper, arguing that the bitcoin price’s 550% year-to-date increase is based purely on investor speculation — not the fundamentals of the asset itself.
After beginning the year at $1,000 — which at the time was a near-record level — the bitcoin price has added another $4,500, yielding crypto investors and forward-thinking hedge funds astronomical profits. Morgan Creek Capital’s Mark Yusko thinks the bitcoin price could potentially reach $1 million within the next several decades, but UBS is not convinced.
“We think the sharp rise in cryptocurrency valuations in recent months is a speculative bubble,” CNBC cites the UBS note as saying.
UBS is bearish on the ability of bitcoin — or any unbacked cryptocurrency for that matter– to truly become a mainstream currency. Specifically, the bank expresses skepticism that individuals and companies will adopt a currency en masse if they cannot use it to pay tax receipts. Consequently, governments may be able to throttle public adoption by refusing to accept cryptocurrencies for tax payments.