UBS Takes a Jab at Bitcoin, ‘No Major Bank is Backing Bitcoin’
UBS Bites Bitcoin
Derek De Vries and his team at UBS made some unpleasant remarks about the success of bitcoin. The note starts off by comparing the digital currency turbulence with that of any form of money. Value will always fluctuate. The statement also mentions that bitcoin’s volatility restricts it from becoming stable.
“Bitcoin’s speculation-driven volatility prevents it from being a stable store of value or unit of account, and its semi-fixed supply exacerbates volatility and deflationary pressure.”
UBS adds that for the amount of transactions that are done in bitcoin, the technology is far too superior. The note blames that due to bans and restrictions from countries like Russia and India, bitcoin “can be damaging to trust and sentiment.”
In addition, the note states how “No major bank is backing bitcoin.” Without support from major banks, bitcoin users can not open bitcoin oriented bank accounts.
USB is not completely detached from the idea of bitcoin, but feel a third party could assist to separate bitcoin from its own powerful technology. The note reads:
“A bitcoin-like system could provide enhanced security and lower costs, by giving users direct control of their funds and the ‘private key’ which is used to ensure security through encryption. In principle, this kind of payment system could be developed and put into use by a third party — even a (possibly online-only) challenger bank that could appropriately handle deposits — which could potentially be a threat to existing banks.”
It seems as though UBS has a problem with the bitcoin unit itself, but appreciate every aspect the virtual currency offers.
Companies and individuals who don’t yet see bitcoin’s full potential are usually the first to shew it away. Warren Buffett has been quoted saying that bitcoin is “a mirage“.
Buffett’s comment caught the attention of bitcoin venture capitalist, Marc Andreessen. Andreessen responded, calling Buffett and those like him “old white men crapping on new technology they don’t understand.”
In lieu of what UBS says about bitcoin’s lack of backing banks, the Andressen Horowitz partner is doing all they can within their financial power to push bitcoin forward. This means bitcoin is only getting started, and UBS may want to hold off on their negative opinions for the time being.
For more bitcoin news, stay tuned to CoinReport.