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.

Read More Here:

Like what you read? Give Strategic Coin a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.