UBS: Cryptocurrencies Are a ‘Speculative Bubble’

[sheld0n]

UBS has said that cryptocurrencies like bitcoin are a ‘speculative bubble’ and are unlikely to become a mainstream currency. Yet, it believes the blockchain may have a ‘significant impact’ on many industries.

In a white paper titled ‘Cryptocurrencies – Beneath the Bubble‘ that was published this week, UBS said:

We think the sharp rise in cryptocurrency valuations in recent months is a speculative bubble.

The bank added that it was ‘doubtful cryptocurrencies will ever become a mainstream means of exchange.’

The need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption.

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[cellard]

UBS has said that cryptocurrencies like bitcoin are a ‘speculative bubble’ and are unlikely to become a mainstream currency. Yet, it believes the blockchain may have a ‘significant impact’ on many industries.

In a white paper titled ‘Cryptocurrencies – Beneath the Bubble‘ that was published this week, UBS said:

We think the sharp rise in cryptocurrency valuations in recent months is a speculative bubble.

The bank added that it was ‘doubtful cryptocurrencies will ever become a mainstream means of exchange.’

The need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption.

Same narrative as seen by other banks that feel threatened with bitcoin. Nothing new under the sun. Let them saying it will never become a viable currency because it's volatile and not backed by governments, maybe they will eventually understand that the #1 use for bitcoin is as a better gold alternative, not a currency for daily groceries or whatnot (this may be possible with lighting network eventually anyway)

[soham]

Most of the mainstream banks and organized financial sector companies are seeing bitcoin as a big threat to their business. The bitcoin market cap is now at 99 billion USD and a majority of that fund has never reached or filtered through a bank account. So they don't get their hands on that money. That's why they are getting increasingly worried as they are loosing business on a global level. Started with JPM, second was an African Bank and now UBS. They have started an organized attack to bring down the morale of bitcoin investors and they are thinking that their statements will have a major effect on bitcoin price. We just need to ignore their statements and continue with our great work with crypto industry. Be prepared for more such attacks but if we are confident about the crypto industry, no one can break us down.

[tiggytomb]

This is similar to what we have heard many times by the same people, I don't think there are too many people hoping that the banks and government would welcome bitcoin and start dictating what people can and can't do, even if they wanted to they simply can't and this is where the fear mongering comes from.

Many if not most banks have already starting looking to use the blockchain to speed up processes and save money, they will eventually create their own digital currencies but bitcoin will still be at the forefront and there isn't much they can do to turn people away from bitcoin.

[BitHodler]

It's ok, I seriously don't expect banks to show any actual appreciation for something that threatens their entire existence.

I don't know how many financial institutions have called Bitcoin a bubble throughout the years, but it started back when this market was still hovering below the $500 mark, which for me still feels like yesterday, lol.

Take this in mind, the larger Bitcoin grows, the more resistance will come from the financial institutions. It basically means that whilst Bitcoin is growing, banks more and more see themselves in a losing position.

At some point in the future they will have to make a decision, will they continue to go against Bitcoin, or will they start coming on board ~ the saying goes, if you can't beat them, then join them.

[Hydrogen]

This thread contains good information, charts and graphs for bitcoin not being a bubble:

The cryptocurrency market size is set to grow ten-fold by 2025 according to a new research booklet published by US Equity Research analysts at Canadian investment bank, Canaccord Genuity.

At a time when other analysts are predicting the demise of bitcoin and its peers, and financial figureheads such as Jamie Dimon believe that bitcoin is a “fraud,” Canaccord’s positive outlook for crypto assets is a welcome relief for supporters.

Cryptocurrency Market Size To Grow To $1Trillion

According to the investment bank's analysis, by 2025, as crypto payment networks mature, and consumers, as well as businesses, gain trust in cryptocurrencies, " the total value of all cryptocurrencies required for payments and store of value will grow from $11.2 billion /$16.6 billion in 2017 to $1,132 billion /$92 billion in 2025," that's a Cryptocurrency market size growth of 9998% or a compound annual growth rate of 78% (see chart below exhibit 30 which seems to indicate Bitcoin going to near $500B compared to current market size of ~$72B and the total market cap).

Investors are throwing money at the industry to try and capitalize on currency market growth, at the early stages, before transaction volumes really take off. Canaccord's data shows that bitcoin venture capital investments have grown from an almost insignificant $2.1 million for 2012, to $601 million for 2017. Cumulative venture capital bitcoin investments have surged from $2.1 million to $1.6 billion.



Bitcoin's biggest opportunity is the payment market, and despite all of the media attention the alternative currency is receiving, as a share of the global payment's market, it's still insignificant. Canaccord's analysts note that the cryptocurrency's recent rise in value has been "at least partially by increased transaction volumes as BTC’s usage increases." The report continues "n BTC’s value was simply a matter of 'catching up' to the transaction volume" also the recent "correction correlates closely with a softening of transaction volume."








If this relationship continues to hold true (which is highly likely) then as bitcoin transaction volumes grow, investors in the asset should be well rewarded. Indeed, bitcoin daily transaction volumes were only $131 billion during 2016. In comparison, Western Union volumes were 461% higher at $735 billion, and Paypal volumes came in at $970 billion. MasterCard processes 202x more transaction volumes with bitcoin and Visa processes 172x. Put simply. bitcoin is still a speck on the global payments landscape.

As cryptocurrencies continue to grow their percentage share of total daily transaction volumes, the value of these assets should continue to expand concludes the report. Rather than placing a price target on bitcoin, Canaccord's analysts instead compute the estimated size of the cryptocurrency Market size by 2025 arriving at the figure of $1,132 billion based on current trends in both the crypto assets and traditional money markets.



http://www.valuewalk.com/2017/10/cryptocurrency-market-size/

https://bitcointalk.org/index.php?topic=2281270.msg23152743#msg23152743

There are many good arguments for bitcoin not being a bubble.

There's the high growth of bitcoin users where cryptos userbase doubles every 12 months. There are the expected growth projections for the future which could be correlated with increased demand. High enough demand for a prediction of bitcoin being undervalued @ $6,000 being reasonable over the long term. There's the wider international adoption of crypto in countries like japan, russia and elsewhere which could decentralize bitcoin further and increase its stability relative to past eras when bitcoin was heavily centralized in china.

There are valid arguments for bitcoin not being a bubble. Unfortunately, there doesn't appear to be much discussion on the topic.

[kryptopath]

Well this bubble keeps getting popped and blown up bigger so... it's quite the positive trending bubble!

[MissionPhailed]

UBS could be right in the sense that we're currently indeed experiencing a speculative bubble. Figure 17 posted by Hydrogen kinda illustrates that in my opinion. Though UBS (and bank in general) fail to see or admit that those bubbles are part of the usual ups and downs in a steady trend upwards. No doubt prices will go down again after the current peak, but the growth of crypto this year is undeniably gigantic and it seems it begins to 'infiltrate' the general population now. FUD by banks doesn't change a thing.

[aardvark15]

UBS has said that cryptocurrencies like bitcoin are a ‘speculative bubble’ and are unlikely to become a mainstream currency. Yet, it believes the blockchain may have a ‘significant impact’ on many industries.

In a white paper titled ‘Cryptocurrencies – Beneath the Bubble‘ that was published this week, UBS said:

We think the sharp rise in cryptocurrency valuations in recent months is a speculative bubble.

The bank added that it was ‘doubtful cryptocurrencies will ever become a mainstream means of exchange.’

The need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption.

I think they could be overlooking the potential uses for Bitcoin. If Bitcoin has value to a large number of people and it is relatively scarce, it can be used as a store of value. It is also a great method of transferring money quickly and cheaply. Even if it is never used as a mainstream payment method, those other uses are significant and can make Bitcoin retain value.

There will be other altcoins that are a bubble and will fail but the overall concept of cryptocurrencies seems to me to be something that will be around forever. It’s just too good of a concept to suddenly disappear.