The Bank for International Settlements has described crypto as “a combination of a bubble, a Ponzi scheme and an environmental disaster”, but it’s foolish to write off Bitcoin et al, argues Steve Dando, Personal & Business Banker at Australian bank ANZ.
In a blog post, he writes: “With the hype dying down, assumptions of soon-to-be-implemented, crippling regulations now shown to be false, the maturity of the technology itself and with the ever-advancing ease of use for new consumers, the crypto industry has more room to grow than ever.”
He adds: “Competition between cryptocurrencies and an inevitable rebuild of market enthusiasm will burn away the coins not fit for use. No doubt there will be more ecstatic price pumps and depressing drops, more media scaremongering around regulations and government ‘bans’, and certain coins will be ridiculed for failing to meet their ambitious tech goals. This is no different to any other fledgling industry.”
“If crypto’s unofficial goal is to tackle the existing financial structures of the world – a system of which has held a tight grip over society for millennia – then perhaps it isn’t fair to yet cast judgement on such an incredibly fresh aspiration,” Dando concludes.
Taking down crypto
Dando might be a fanboy, but much of the banking establishment remains unconvinced. Wall Street is iffy at best despite the high profile launch of regulated exchange, Bakkt, by NYSE owner Intercontinental Exchange.
When asked by Yahoo! Finance if Bakkt showed Wall Street was serious about crypto, Alan Valdes, a senior partner at international advisory firm Silverbear Capital and NYSE trader, said: “I don’t know, I think it’s a stretch. I did see that, but Bitcoin is very iffy right now. How do you protect your Bitcoin? If someone hacks into these wallets, it’s like losing cash, you are out.”
“So, I think Bitcoin has a long way to go for the average person to get involved. Maybe in some emerging markets you’ll see it take hold where that currency could be a little stronger, it might work. But I think here for trade, we hit $20,000 with Bitcoin. Will it get there again? Anything is possible. But I’m not so sure.”
Elsewhere, a report by UBS states that the Bitcoin price must hit nearly $213,000 to replace US money supply. It argues that the cryptocurrency cannot currently be considered money or a viable asset as it is hamstrung by the capacity constraints of the BTC network.
The report says: “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.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.