Union Bank of Switzerland (UBS) in its latest report, has outlined certain conditions which bitcoin must meet in order to take the place of fiat money in the United States. One of these requirements, according to Bloomberg is that BTC prices will have to hit the $213,000 mark.
In addition, the strategists at UBS concluded that bitcoin at the present moment does not qualify as money due to its price fluctuations and limitations inherent in its blockchain. The report read:
“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.”
These arguments raised by UBS are nothing new to cryptocurrency observers as they have been blamed for the slow mainstream adoption of bitcoin. Bitcoin was created as an alternative to regular currency to serve as a store of value and a medium of exchange. Though it holds promise which has drawn a lot of attention to it, it still lags greatly behind traditional payment systems like Visa in terms of speed.
Recent studies have shown that the actual use of bitcoin for transactions has dropped drastically. A study that compared Canadians’ interest in bitcoin between 2017 and 2018 showed that only 6 percent of respondents in 2018 keep bitcoin for use in buying goods and services. Bloomberg also reported a similar study by Chainalysis showed a similar decline.
Rabid bitcoin proponents are undeterred by these unfavorable reports as they firmly believe that it was only a matter of time before the cryptocurrency replaces fiat. The UBS report noted that “while cryptocurrencies have the potential to become an alternative asset class, their prices are likely to remain highly volatile, appealing more to speculative investors.”