According to Swiss International Bank UBS, if Bitcoin price reaches $213,000 or it sees substantial technical improvements, it may replace U.S. Dollar, Bloomberg reported. Currently, Bitcoin is limited by a relatively smaller volume of transactions compared to industry giants such as VISA.
Report by UBS finds Bitcoin too unstable and does not expect it to become a globally adopted payment system. The bank also underlines that only speculative investors are interested in Bitcoin due to cryptocurrencies volatility.
Volatility is sought by short-term traders who are aware of the market mechanics “game” and can shoot trading orders minute by minute. More changes in the price mean more trading.
WHY IS IT IMPORTANT?
1. It is extremely unlikely for Bitcoin to reach as high as UBS mentions. However, this report indicates that traditional institutions are on the watch out for Bitcoin and it’s potential.
2. Many countries acknowledge that cryptocurrencies are nothing to be afraid of, as they don’t pose significant risks to the economy. However, meeting technological requirements Bitcoin may achieve complete decentralization from the U.S. dollar.
Debate on replacing U.S dollar is obviously a speculative one. Meanwhile back in May Swiss government requested study into potential benefits and drawbacks of the so-called “e-franc”, the country’s state-backed cryptocurrency, which might actually replace Swiss franc.