The surge of bitcoin is the hot topic of discussion among bankers this summer. The cryptocurrency promises salvation and quick returns in equal measure – a contradiction in terms. finews.asia tallies further inconsistencies.

1. Banks Love Blockchain and Spurn Bitcoin

There’s hardly a big bank or global insurer not to expect the use of Blockchain to lead to a thorough reform of the financial market. They therefore plough billions into the development of the technology and into its applications. The same companies spurn bitcoin though, the first product that the Blockchain technology has brought about: they claim that bitcoin is mumbo jumbo without a proper value to back it up. This contradiction is easily explained through the focus on products of big banking institutes. They value what they generate  in their own product pipelines and what they can actually sell.

2. Safe Harbor Myth

The search for safe investments is being used to explain the surge of bitcoin above a level of 4,000 Swiss francs. Faced with concerns about a potentially disastrous war on the Korean peninsula, investors are said to be looking for a safe haven: gold, the franc – and bitcoin. A safe harbor? You couldn’t be further from the truth. Bitcoin investors have had to deal with a fluctuation measuring up to more than 50 percent and the currency itself is faced with a potentially terminal tarnishing of its reputation because of its use by Darknet criminals.

3. Wealth Managers Fail to Understand Their Clients (Once Again)

Bitcoin isn’t an object of speculation for poor people. The crypto currency is in the focus of rich investors, based mainly in the Middle East and Asia. At the same time, Swiss wealth managers keep complaining about their clients’ aversion to risk. It probably is rather a case of distinguished private bankers failing to understand the needs of their clientele. Knowledge about crypto currencies and relevant products should feature among the offerings of the private banking industry.

4. Banks – and a Touch of Hypocrisy

Almost every investment committee claims that banks will never recommend clients to invest in bitcoin: the bitcoin currency system is unsafe, too volatile and not fully developed, they say. In the 1990s and again the early years of this century, banks had fewer inhibitions to flog tech products that were much less thought through though. The outfall of the subsequent burst of the bubble lingers on and affects bitcoin today: even though the crypto currency is based on a technology that is well established and claims substantial trading volumes, banks won’t touch it with a bargepole.

5. Far Removed From Noble Beginnings

Bitcoin started out as an anarcho-currency following the financial crisis, as an independent, transparent and anonymous counterpart to the tainted image of cash and for ready use without the help of any banking institute. Libertarians, occupy-militants and weirdo-billionaires loved it. The restriction to 21 million bitcoins was readily accepted. This original idea has been swept away since: banks, global corporations and countries have taken over the technology used to build the crypto currency. And bitcoin has become the latest object of desire for casino capitalists so much despised by the founders of the currency.

6. Ultra-modern Technology? You’ve Got to Be Kidding.

Blockchain may have a revolutionary potential, but the trading in bitcoin is taken right from the middle ages. The bitcoin network manages seven transactions a second, a frequency that is nothing but a cruel joke in our times. With the bitcoin boom the Blockchain technology quickly seems stretched, despite an enormous computing firepower and decentralized systems. There’s no solution to be detected to this problem. The hallmarks of a currency for the future?

7. A Bitcoin Crash? So What?

The bitcoin surge to the current level of more than $4,000 has caused a wave of crash warnings. Commentators write about the potential outfall of a crash. But with the market cap of a current $66 billion, one is tempted to ask: «So what?» Blue chip companies across the world have similar valuations. Nestle is worth 222 billion Swiss francs alone. A bitcoin crash wouldn’t cause a shock wave as doomsday scenarios would have it.

8. Ecologists Will Never Get to Like It: Bitcoin Gobbles Up Electricity

Bitcoin may be attractive to people opposed or critical about the current economic system. But for the green movement, bitcoin harbors no allure. A single transaction uses up as much energy as 1.57 U.S. households in one day, estimates have shown. The bitcoin network emits about 7.6 million tons of CO2 a year. With every expansion of the crypto currency, the use of energy rises accordingly. The makers of bitcoin therefore do what globalization experts have done for years: they produce in China.

9. Currency for the 21st Century? Another One?

In the hype surrounding bitcoin, the currency has been made to be the currency of the 21st century. The idea is that the currency will revolutionize the payment and currency systems. A similar hype was created at the beginning of this century when CO2 certificates were introduced and became a tradeable security. The dreams about a global trading system for the new currency have since evaporated. Question is, will bitcoin go the same way? It might – but then again, it might not.