The Global Investment Bank stated that Bitcoin is still not stable enough in order to become mainstream money. UBS thinks that bitcoin has a lot of problems that need to be solved if bitcoin wants to get that mainstream attention and adoption. Some of the factors that prevent bitcoin from doing so are its constant price fluctuations and its technological limits as well.
UBS’s macro strategist Joni Teves said that bitcoin is very limited and thus cannot become a serious and credible means of payment and also noted that what she believes to be the biggest problem is the price instability which is why bitcoin can’t be considered as real money.
Bitcoin doesn’t fulfill the most important criteria that need to be fulfilled in order to be considered real money. Since the beginning of this year, the price of cryptocurrencies lived through a great decline compared to last December, which is more than a 60% drop. Also, last week we saw bitcoin trading at $8.000 but it went through another decline reaching somewhere about $7.360.
This kind of price fluctuations represents a major concern for short-term investors, but on the other hand, long-term ones find it very rewarding. However, bitcoin did outperform several other investment options and grows constantly for more than 200 percent annually.
Teves also said: “To process Visa’s c.$30 billion of daily transactions using the old core protocol, the block size would need to be 18.8MB instead of 1MB, or the price would have to be around $187,611,”.
She does, however, believe that cryptocurrencies especially bitcoin has a really great future and can be considered a ‘’legitimate asset’’.
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