The Union Bank of Switzerland (UBS) predicts that the price of a single bitcoin (BTC) can reach almost USD 213,000.
Not only that, at this level of value, the main cryptocurrency would be able to replace the dollar’s demand. According to Bloomberg, the new UBS report suggests that BTC can not be considered money at this stage, because its functions are limited by the bandwidth of the network. The report reads:
“Our analysis suggests that Bitcoin, in its current form, is too unstable and limited to become a viable means of payment for global transactions or a major asset class.”
The report states that although digital currencies can potentially become an alternative class of assets, their prices are likely to remain unstable. The number of bitcoins used in the trade dropped significantly over the last year, when it reached its highest level in history – USD 411 million in September 2017.
Regarding price volatility in cryptocurrency markets, Kim Grauer, a senior economist at Chainalysis, notes: “When the price [soaring] so rapidly last year, you could have lost $ 1,000 in one day if you had already spent [your bitcoins].”
Nicholas Weaver from the International Institute of Computer Science added that the digital currency is not “useful” as a form of payment. The reason is high transaction fees.
Bitcoin the payment market leader?
The UBS report states that the BTC processing efficiency needs to be significantly improved so that the main cryptocurrency would be an effective form of payment. Nevertheless, some advocates of digital currencies believe that the Satoshi Nakamoto coin will become a global payment method.
In March, general director of Twitter and Square payment service, Jack Dorsey, said he sees BTC as the only future global currency. This process will take “probably over ten years, but it can also happen sooner”.
In response to many concerns of Wall Street investors that cryptocurrencies are a bubble, Bill Miller, millionaire, investor and founder of the Miller Value Partners hedge fund, said in March that “bubbles are necessary to bring capital to market.” For him, BTC is one of the most important inventions in history