UBS has claimed that Bitcoin is not yet a viable asset class nor money, as the investment bank releases a research report into the cryptocurrency.
The report, published this week by UBS strategists, says that Bitcoin does not meet the criteria “that needs to be satisfied to be considered money,” but could one day scale to the point where it is a viable means of exchange.
It continues: “Fixed supply and unusual demand dynamics make the system susceptible to high price volatility, in turn making it difficult for Bitcoin to step into the role of money or to be a viable new asset class.”
For the study Bitcoin was compared with macro variables, online services such as PayPal and its performance against other asset classes.
Research was carried out in response to investors’ growing interest in the crypto space, according to UBS, and so the Switzerland-based company is keen to follow the development of Bitcoin and cryptocurrencies in general.
“We have received many questions on the subject which we hope to address in this educational piece,” it added.
Back in 2017, UBS was very sceptical of crypto’s ability to become widespread but optimistic about blockchain. Writing in a report dubbed Cryptocurrencies – Beneath the Bubble that:
“While we are doubtful cryptocurrencies will ever become mainstream means of exchange, the underlying technology, blockchain, is likely to have a significant impact in industries ranging from finance to manufacturing, healthcare, and utilities.
“We estimate that blockchain could add as much as $300-400 billion of annual economic value globally by 2027.”