Cryptocurrencies have soared in popularity, there are now more than 1,000 in existence with an aggregate value greater than the market capitalisation of IBM.
Bitcoin has now broken through the $5,ooo mark despite the recent and high profile negative comments from J.P. Morgan chief Jamie Dimon, signalling to investors and traders alike that bitcoin is an almost un-killable beast, or at least an incredibly robust animal.
Remarkably confidence in future gains for bitcoin remain high even after the digital currency added nearly $400 in one day. UBS however is sceptical and thinks the sharp rise in crypto-currency valuations in recent months is a speculative bubble.
In the most recent UBS Wealth Management's chief investment office report on Cryptocurrencies, «Beneath the Bubble,» Sundeep Gantori, equity analyst, UBS Wealth Management remains to be convinced.
Bitcoin Maybe Blockchain Yes
Gantori and his team are highly doubtful whether crypto's will ever become mainstream currencies. Companies and individuals need to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption he says in the report.
But while the UBS chief investment office is doubtful cryptocurrencies will ever become a mainstream means of exchange, it believes the underlying technology, blockchain, is likely to have a significant impact in industries ranging from finance to manufacturing, healthcare, and utilities.
Before The World Wide Web
Investing in the blockchain wave is akin to investing in the internet in the mid-nineties. The Swiss bank is known to be exploring smart contracts itself and how they apply to complex financial instruments.
Blockchain could lead to significant disruptive technologies in the coming decade. But for the time being, technological shortcomings still need to be resolved, the report points out.
