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Bitcoin has so far created a lot of hope among investors that it could possibly emerge as a global currency replacing the U.S Dollar in the near future. However, the study by IMF and other global agencies suggest that cryptocurrencies still have little influence over the global economy, and hence there is a long journey still to travel further.
On Wednesday, August 2, Bloombergreportedthat the Union Bank of Switzerland (UBS) based out of Zurich has recently said that in order to replace the U.S money supply, Bitcoin price should climb to $213,000 per token and above. The report quotes UBS saying that currently Bitcoin can be considered as a currency or a viable asset class due to the limitations of its network. The Union Bank says:
“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 also notes that the Bitcoin network falls much short in terms of transaction processing abilities against existing giants like Visa Inc. and Mastercard. Moreover, the extremely volatile nature of Bitcoin and other digital currencies could hold them from potentially emerging as an alternative asset class.
Citing the latest study from market-research firm Chainalysis, Bloomberg alsoreportsthat there has been a considerable drop in the use of BTC in commerce transactions since last year in September 2017, when it was at its peak at $411 million. Nicholas Weaver, a senior researcher at the International Computer Science Institute told the publication that Bitcoin is “not actually usable” as a means of payment with its high transaction fees being one of the main reason.
Weaver also argued that the cost of Bitcoin transaction is “far more than a credit card transaction” and more importantly it cannot be reversed in instances of fraud. However, supporters of Bitcoin still continue to believe that it will emerge as the world’s single payment method one day. Twitter CEO Jack Dorsey in the past hassaidthat he hopes for Bitcoin to be the world’s native currency.
At the Consensus 2018 Conference in New York, Dorsey said: “The internet deserves a native currency; it will have a native currency. I don’t know if it’ll be Bitcoin or not,” he said, but “I hope it will be. It’s going to happen. We need to learn how to help make that happen.”
While commenting on the price volatility of Bitcoin, Kim Grauer – senior economist at Chainalysis said, “When the price [was] going up so rapidly last year, in one day you could lose $1,000 if you spent it.”
There is no doubt about the fact that for Bitcoin to emerge as a global currency, there is a far long journey ahead of it. However, with the developments taking place in the blockchain space this doesn’t seem too impossible as well.
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