Zurich-based investment bank and financial services company Union Bank of Switzerland (UBS) has said that the Bitcoin (BTC) price must hit nearly $213,000 to replace U.S. money supply, Bloomberg reported August 2.
According to Bloomberg, a new report by UBS suggests that BTC cannot currently be considered money or a viable asset as its versatility is stymied by the capacity constraints of the BTC network. The report 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 states that while digital currencies can potentially become an alternative asset class, their prices are likely to remain volatile. The volume of BTC used in commerce declined significantly during the last year since its peak of $411 million in September 2017, per a recent survey by market research firm Chainalysis.
Regarding price volatility in crypto markets, senior economist at Chainalysis Kim Grauer said, “When the price [was] going up so rapidly last year, in one day you could lose $1,000 if you spent it.”
A senior researcher at the International Computer Science Institute, Nicholas Weaver, told Bloomberg that digital currency is “not actually usable” as a form of payment, citing high transaction fees as the main reason.
While the UBS report states that the BTC network’s processing efficacy must significantly improve in order to be an effective form of payment, some BTC evangelists believe that the leading digital currency will become the world’s single payment method.
In March, the CEO of both Twitter and payment service Square, Jack Dorsey, said that he sees BTC as the world’s single future currency, the emergence of which will take “probably over ten years, but it could go faster.”
In response to many Wall Street investors’ concerns that cryptocurrencies are a bubble, Bill Miller, multi-millionaire investor and founder of hedge fund Miller Value Partners, said in March that “bubbles are necessary to bring capital into the market to see if these innovations are actually going to stand,” and compared BTC with major inventions throughout the history.