Head of global commodities and derivatives research, Francisco Blanch says that cryptocurrencies remain prone to fraud, theft, new protocol adoption and lack of acceptance.
Reasons Behind Call
BofA's global commodities and derivatives research head is suggestion that Bitcoin's volatility remains higher than emerging market currencies and that cryptocurrencies do not correlate with gold, oil, G10 currencies or equities.
Blanch also said that cryptocurrency returns rely on price appreciation that mainly depends solely on the faith of corporations and individuals. Blanch feels that Bitcoin trading at today's prices of $2,800+ is more than double the price at the beginning of the year, should cause for concern.
Most regulated financial companies permit clients to borrow against physical and financial assets, but they do not take cryptocurrency as collateral at the present time, Blanch observed. This view matches that of Morgan Stanley analysts who stated in June that government acceptance is needed for cryptocurrency appreciation, coming at the cost of regulation.
Morgan Stanley Agrees
As stated in a recent video I posted about banks and bitcoin, Morgan Stanley believes that the only way price appreciation will continue will have to be from government's accepting it but this will be at the cost of higher regulation.
In their white paper from June, Morgan Stanley stated that both investors and regulators view cryptocurrencies as assets more than actual currencies. The analysts, stated that bitcoin and other cryptocurrencies, such as Ripple and Ethereum, are more like “investment vehicles” than fiat money that people would spend on products and services. Morgan Stanley also states that bitcoin represents a “marginally more inconvenient way to pay [for goods and services],” and there are only a handful of reasons to use the cryptocurrency instead of a credit or debit card.
My Two Satoshis
Yet again, I see the banking industry, in general, missing the point of cryptocurrencies altogether. The reason that 70% of the people that hold cryptos is not because they feel it is a more "convenient" way of paying for things, but instead it's that people are waking up to the fact that the banking system is inequitable and cryptos offer a convenient way of circumventing this system for the most part.
The people that get it, aren't necessarily modeling the price of this "technology" using the financial-world's' matrices but pricing the potential for usage on a grand-scale-- a scale that would allow the poorest of the poor to have a chance at economic equality.
Question / Thoughts
- Do you feel the cryptospace as a whole is in bubble territory?
- Are Morgan Stanley and BofA's assessment of Bitcoin right?
- Does the banking industry need to rethink the way they look at cryptocurrency?
I think the main reason why people get into crypto and hold crypto is because they believe it's value will be higher in the future than it is now. Nobody really turns fiat into crypto because crypto is more handy.. yet anyway. It's all speculative on a higher future price. Therefore yes, in a way it is a bubble. But no moreso than us putting significant faith in the value of a lousy metal called gold, or the paper bills we hold in our hands. It's only a bubble if it bursts, otherwise it's a revolution.
Yes I mean I agree, at some point all asset classes end up in bubble territory. I just don't think we are nowhere near that -- seeing that less than 2% of the investment class even owns it and less than 0.05% of the world's pop even knows about it. Good response though - Upvoted!
Thanks!
Yes I truly believe it all has to do with whichever asset people believe has value. When you look at crypto this becomes obvious as Bitcoin is the most valuable yet there are identical, and improved versions of it that are 'worthless'. The only reason is people believe in Bitcoin and not in some other coin (or atleast not as much).
What I really think is going to happen is that no coin will remain 'the' standard in the future. I think we're going to have to get used to living in a speculative economy for the duration, with no certainties. Bitcoin's dominance will continue to be challenged and perhaps someday surpassed.. it all depends on where people's beliefs shift to.
of course the banks are going to warn against it and scare people away by saying it is bad and it is so volatile 'keep away sheeple ' crypto is there worst enemy as it means they all f##ked up realy and truly crypto is the debt free future and not the fake paper they print every bit of wealth that goes into crypto little by little takes the power away from the criminal elite bankers and corrupt polititians
Good, the world needs more fools ;)
lol