The world’s largest and most popular cryptocurrency is still a far cry from playing the role of real money, according to global investment bank UBS.
“Bitcoin is still too unstable and limited to become a viable means of payment or a mainstream asset class,” UBS strategist Joni Teves wrote in a note to clients Thursday. “Owing to its lack of price stability, bitcoin falls short of criteria that need to be satisfied to be considered money.”
Among its biggest roadblocks are recent dramatic price swings and some technological limits, according to UBS.
The cryptocurrency’s price has been marked by peaks and valleys this year. It often varies by hundreds of dollars in a single day and has fallen more than 60 percent since nearing a high of almost $20,000 in December. The digital currency was trading near $7,500 as of Thursday and has fallen roughly 50 percent in 2018, according to data from CoinDesk.
Teves looked at the price of bitcoin historically, and found that 70 percent of those price swings were the result of speculative “momentum-driven” interest which makes bitcoin “vulnerable to large moves.”