Union Bank of Switzerland, an investment bank and a financial services company suggested that Bitcoin price will have to hit the $213000 mark in order to replace fiat currency, as reported by Bloomberg on August 2.
UBS, a company based out of Zurich said in a news report that although the cryptocurrency is growing fast, it cannot be considered as viable money option because of a number of processing constraints posed by the BTC network. The report read, “Bitcoin to replace U.S. money supply — paper bills, coins, travelers’ checks and the like — it’s price would need to hit nearly $213,000, or its network’s processing capabilities would need to dramatically improve.”
The report also mentioned the fact that Bitcoin is undoubtedly an alternative financial asset but dwindling prices and volatile markets make the digital coin unreliable. In a survey conducted by Chainalysis, it was found out that Bitcoin’s trade volume has only been declining after it hit an all-time high of $411 million in September last year.
Referring to the market volatility, Kim Grauer, a senior economist at Chainalysis said, “When the price [was] going up so rapidly last year, in one day you could lose $1,000 if you spent it.”
Another drawback star shining Bitcoin’s potential is the high transaction fees involved. The cryptocurrency industry is collectively looking for ways to solve the said problem. However, a lot of people are showing their reluctance in substituting the traditional currency by virtual currency. Nicholas Weaver, a senior researcher at the International Computer Science Institute voiced his concern about this issue and went on record to say that the cryptocurrency was “not actually usable.”
Jack Dorsey, the founder of Twitter, nevertheless, has high hopes for Bitcoin and was quoted as saying, “The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin.”
A significant number of wall street investors claim that cryptocurrency is nothing but a bubble and are waiting for it to burst. Amidst such suspicion and uncertainty, Bill Miller, the founder of Miller Value Partners, a hedge fund has a rather positive opinion about the supposed bubble. He said, “bubbles are necessary to bring capital into the market to see if these innovations are actually going to stand.” In addition to that, the multi-millionaire investor called Bitcoin one of the biggest inventions ever witnessed.