Swiss Banking Giant Warns Against Buying Bitcoins That Are ‘Not Money’
REUTERS/ Dado Ruvic/IllustrationBusiness21:19 17.12.2017(updated 21:27 17.12.2017) Get short URL365
Since the beginning of 2017, the price of Bitcoin has skyrocketed, from $997 on January 1 to nearly $20,000 by mid-December.
“In my opinion, bitcoins are not money,” Axel Weber, chairman of Swiss financial giant UBS, said in an interview to Swiss news agency NZZ am Sonntag on Sunday.
The official has called on regulators to act, as the cryptocurrency is just a bubble with “design flaws” that will inevitably burst.
While speaking about its flaws, Weber said that Bitcoin fulfilled none of the three main functions that money has.
First of all, Bitcoin isn’t universally accepted, thus making the cryptocurrency an ineffective way of payment.
Furthermore, Bitcoin isn’t a good measure of value as prices are not written in it, while its unstable value makes Bitcoin a bad way to store one’s money.
According to Weber, without a regulator controlling the supply, Bitcoin’s value is determined only by demand, leading to “huge price fluctuations in both directions.”
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The statement comes after Bitcoin broke a threshold of $20,000 earlier today prior to the launch of Bitcoin futures trading at the Chicago Mercantile Exchange (CME).
Since the beginning of 2017, the price of Bitcoin has skyrocketed, from $997 on January 1 to nearly $20,000 by mid-December. The futures are believed to further increase its value and result in wider acceptance of the cryptocurrency on the financial markets.
Earlier this month, Denmark’s Saxo Bank issued a report dubbed “Outrageous Predictions” predicting Bitcoin’s phenomenal growth to the value of some $60,000.