Unfazed by Bitcoin’s extended correction, the most devout crypto faithful maintain that Satoshi’s peer-to-peer digital currency may one day replace the dollar. According to UBS, the largest Swiss banking institution in the world, this prophecy won’t come to light any time soon.

In a research report distributed to clients in more than 50 countries, UBS stated that Bitcoin is too volatile and technologically limited to become a standardized currency. According to Bloomberg, the report states:

“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.”

UBS does not rule out the possibility of a world dominated by Bitcoin, however.

To dethrone the greenback, Bitcoin would have to reach $213,000 per token or make inordinate improvements in scalability, according to the Swiss multinational.

UBS — a 156-year-old financial institution — may view Bitcoin through the lens of classical economics. Traditionally, assets with small market capitalization are viewed as riskier investments — and when compared to gold, stocks, or other assets, Bitcoin’s $128.8 billion market cap may be viewed by financial titans as a proverbial pipsqueak.

With larger access to capital, higher trading liquidity, and more transparency, a larger market capitalization could potentially erase the bulk of Bitcoin’s price volatility. To dethrone the greenback, UBS believes Bitcoin would have to reach the lofty figure of $213,000 per unit.

Such a valuation would put Bitcoin’s market cap at roughly $3.66 trillion — more than double the $1.67 trillion of USD cash in circulation as of June 2018.

Processing a maximum of 10.7 transactions per second, Bitcoin’s notorious ‘bottleneck’ may have become synonymous with the search for blockchain scalability.

Attempts to upgrade Bitcoin’s technological capabilities have been plentiful — ranging from second layer solutions such as Lightning Network to hard forks optimized for faster and cheaper transactions (Bitcoin Cash).

To UBS strategist Joni Teves, however, these attempts have been “insufficient” to resolve the network’s scalability — presumably comparing Bitcoin’s speed to standardized payment processors such as Visa, which can handle thousands of transactions per second.

According to CNBC, she told UBS investors:

Bitcoin cannot handle the volume of transactions processed by mechanisms being used in the real world.

Having previously described Bitcoin as a “speculative bubble”, UBS’ latest comments seem atypical of a centuries-old financial institution. Their deep contemplation of a future dominated by Bitcoin, however, speaks volumes.

The post UBS: Bitcoin Must Reach $213,000 to Rival US Dollar appeared first on CryptoSlate.

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