Bitcoin has often been touted as the cryptocurrency to replace the U.S. dollar, but according to UBS it needs to reach $213,000 first.
A Long Way to Go
A new 34-page report from the Swiss multinational investment bank isn’t putting much faith into Bitcoin replacing the dollar.
According to UBS, Bitcoin would have to reach $213,000 per unit. Failing that, its network processing capabilities would have to improve, reports Bloomberg. At the time of publishing, Bitcoin is valued at $7,366, according to CoinMarketCap. Over the past seven days, it has dropped by over 7.50 percent.
The UBS report reads:
Our findings suggest that Bitcoin, in its current form, is too unstable and limited to become a viable means of payment for global transactions or a mainstream asset class.
The report comes at a time when Chainalysis Inc. has also released data on Bitcoin usage.
Yesterday, the company published new research suggesting that the number of people using the cryptocurrency is dropping. In September, the amount of Bitcoin received by 17 of the biggest crypto merchant processing services peaked at $411 million. In May, that figure had dropped to $60 million. While this is still a significant amount of money, it pales in comparison to what it was.
Not only that, but with the cryptocurrency rising in value toward the end of 2017 people were keen to hold on to their coins rather than spend them. It’s easy to understand why. For many, “hodling” is what they are most interested in rather than using Bitcoin as a means of exchange. If, though, that’s the thinking of the entire Bitcoin community, it may not do much than cause a slight ripple in a massive pond.
The Community Still Hopes
Despite the reports from UBS and Chainalysis Inc., the Bitcoin community have faith in where it’s heading.
In June, Ken Jacobs, CEO of Lazard Ltd., a financial advisory and asset management firm, expressed the view that the cryptocurrency market could become an alternative to the U.S. dollar’s reserve status. At the time, he said, “…we’re sort of tempting the world to find an alternative.”
Could cryptocurrencies step up to the mark?
A survey from late June has also projected that Bitcoin ownership could double in the future. This is regardless of its volatility and lack of regulation. All that needs to happen now is to create an attractive environment for hodlers to use their crypto assets for goods and services.
Only then can Bitcoin become a potential contender to the U.S. dollar’s status.
Do you think Bitcoin will replace fiat currency or do you think it will continue alongside it? Let us know in the comments below.
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