Bitcoin, Crypto currency, Blockchain

UBS: Bitcoin is still too volatile to act as a global currency

c535d272b38bc475595cd542054b6823 - UBS: Bitcoin is still too volatile to act as a global currency


Can Bitcoin make the U.S. Dollar competitive currency? The Swiss Bank UBS thinks it’s possible, if the BTC should develop the course accordingly. So far, the price of the Bitcoin, however, is yet to be fickle.

To 216,000 US dollars: This is the Region where Bitcoin has to move to be able to be in the League of the US dollar play. This assessment Joni Teves of the Swiss Bank gigantin UBS. Literally, it was in a Report on UBS clients:

“Our results suggest that Bitcoin in its present Form is too unstable and too limited to be a viable means of payment for global transactions or a Mainstream asset class. Due to the lack of price stability is left Bitcoin behind the criteria that must be met in order to be considered as money.“

Teves, in addition, analysed the price development of Bitcoin and came to the conclusion that 70 percent of the price fluctuations the result of a speculative impulse-like interest were due on the currency. This will make the crypto-currency, “prone to big market movements”.

Furthermore, the lack of scalability is still a Problem, and the BTC from the mass adaptation separate.

“Bitcoin is not coping with the volume of transactions, and the other mechanisms in cope”

The efforts of the Bitcoin developers for a solution to the scaling issue, yet “not sufficient”.

Old criticism in a new guise

Already in October 2017 UBS Skepis expressed currencies in relation to the currency and suitability of Cryptographic:

“Currencies to fulfill two roles, the crypto-currencies to take off.”

So Bitcoin would fail for One, to serve as a medium of exchange. This would, in particular, their volatility, which is especially a Problem when it comes to Paying taxes:

“Theoretically, a company could, for free, to crypto-currencies to pay. But it would then have to pay corporate income tax, wage tax and VAT in national currency. The company would take an exchange rate risk. If the government-sponsored currency will win out over the crypto-currency then the value of the company is facing a significant loss.“

Similarly, for the employees:

“If a company is adopted, the staff costs […] to be paid in Bitcoin, would expect the company to their employees, an exchange rate risk. For most of the employees that would be unacceptable. In addition, the staff has to pay his taxes in government-based currencies“

The fickleness of the courses of crypto-currencies was a reason that this was not suitable as a store of value. With no Central Bank, no price was to ensure stability, said the UBS report.

“A single crypto-currency can’t reach this balance, which explains its volatility. The supply of crypto-currency can’t decline. A decline in the demand for a particular crypto-currency will lead to the value of this crypto-breaking currency, when the supply exceeds the demand.“

The Blockchain technology itself, the UBS, however, more open-minded. As attested to UBS CEO Sergio Ermotti to American news station CNBC, the technology to be a “great opportunity” to make banks more efficient and save costs.

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