Bitcoin Needs to Cross $213,000 To Replace U.S Dollar As a Global Currency: UBS Report

According to the latest report from Bloomberg, the Union Bank of Switzerland says that for Bitcoin to be accepted as a global currency replacing the U.S Dollar, its price should cross $213,000, a minimum.

The banking giant says that Bitcoin still has a long journey to go ahead to be considered as a viable asset. UBS says that one of the major reasons thwarting its versatility is the limitation of the Bitcoin network’s processing abilities, which would require a dramatic improvement over the existing for its mainstream adoption.

UBS in its 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. Owing to its lack of price stability, bitcoin falls short of criteria that need to be satisfied to be considered money.”

Bitcoin’s extreme volatility is another reason that is hindering its path to emerge as an alternative asset class. Bloomberg also cites another report from market research firm Chainalysis that the use of BTC in commerce payments has declined considerably compared to last year September, when it was at its peak of $411 million. This goes to show that although the awareness for Bitcoin might have increased in last year, it acceptability in the mainstream financial market is continuously declining.

While commenting on the price volatility of the digital asset, senior economist at Chainalysis Kim Grauer said, “When the price [was] going up so rapidly last year, in one day you could lose $1,000 if you spent it.”

Senior Researcher Nicholas Weaver at the International Computer Science Institute says that the high-transaction fees is also one of the main reasons for Bitcoin to be “not actually usable” as payment alternative. He also says that Bitcoin’s transaction fees still remains high over credit card transaction, neither does its processing abilities match to that of Visa or MasterCard. Another important point he notes that in case of fraud, transactions cannot be reversed on the Bitcoin network.

However, in the last few months, Bitcoin has been enjoying an increasing attention from the institutional space and crypto firms are also seen rushing towards developing various Bitcoin-related investment products.

The Bitcoin community has currently pinned its hopes to the arrival of Bitcoin ETF and any positive nod coming from the SEC could potentially ensure a quick northward swing in the Bitcoin price. Industry heavyweights like Twitter founder Jack Dorsey are quite bullish on the future of Bitcoin and digital currencies. Earlier this year in March, Dorsey said that Bitcoin could emerge as the World’s Single Currency.