Swiss Bank Pinpoints Poor Stability In Bitcoin
The Union Bank of Switzerland (UBS), one of the top leading investment banks across the globe has openly spoken about Bitcoin, stating that two huge factors were severely harming its advancement and development, those being the unpredictable fluctuation of price and its scalability.
The UBS has hopped on board with several other critics of BTC to pinpoint its weaknesses, mainly its volatility and unstable nature. As stated, this factor alone is enough to drive off any eager investors or users from approaching the crypto. Joni Teves, an expert strategist at UBS has stated that the cryptocurrency cannot be classified as a legal tender. He stresses on the fact that additional regulations added to the coin and others, in general, is still required and severe scalability issues are hindering the coin’s mainstream introduction.
The coin’s limitation and instability are too important to overlook and cannot be considered actual money under these conditions. Given BTC’s drop towards $7K after a successful three weeks over the $8K mark, its highest in months and the extended bear trend, critics continuously point towards volatility as a hindering weight on crypto-advancement. Even with a common optimism towards a possible Bitcoin exchange-traded fund being approved by the US Securities and Exchange Commission, USB continuous on the defensive towards Bitcoin’s functionality as a legitimate fund.
A limited supply of cryptocurrencies and unorthodox demand patterns leave the entire ecosystem exposed to incredibly high volatility and add even further complications to the currencies price. Despite this, the UBS isn’t completely denying the cryptocurrency and its possible impact on the future but view these hindering factors as obstacles in need of bypassing before Bitcoin can go mainstream across the world. Should the SEC approve the proposed exchange-traded fund, this would be providing yet another significant step for crypto. As of now, big-name stock markets have yet to support cryptocurrencies completely due to uncertainty in terms of regulations and legal issues associated with digital coins.
Another severely crippling factor is scalability as per the report. This provides a heavy block in front of crypto-market development and capitalization. Earlier this year, cryptocurrency markets were skyrocketing towards their all-year highs and Bitcoin transactions came to a dead stop as a result of incredibly expensive transaction charges and prolonged processing and approval. The cost of any transaction was over $50 USD in January, setting a painfully expensive environment and severe traffic jams throughout the network right when BTC was being viewed and accepted across the world.
Even with all the suspicions and strong criticism, the bank does believe that BTC will eventually become a legitimate and legal method of payment open and available to all users and investors globally. Additionally, promised research into crypto and blockchain-tech by the UBS continues.