US analysts assess risks entity of this cryptocurrency.
Volatility and insecurity are among the main factors. On the other hand, they consider that there are classic signs of very advanced bubble.
It just 2017. A year where Donald Trump has seen the bitcoin stole the spotlight in the market. The most famous cryptocurrency has risen in this period about 1,500%. Its price is set at $ 15,726, though this month has come to touch $ 20,000. Data that generated controversy in the market. Therefore, analysts of US bank Citibank have made a report that seeks to understand “how bad does the bitcoin for the world?”.
Experts offer four possible symptoms of this “disease”. From Citi they understand that the most famous cryptocurrency have a significant group of detractors. “We seek to give an overview to some of their problems and try to assess how the bitcoin can be problematic for emerging markets,” they said in its report.
1. Too volatile. US analysts believe that the bitcoin entity is “too volatile to serve as means of payment in transactions or even as a reserve value,” they say. A fact that justifies this cryptocurrency pointing has a standard deviation of 6.7% between 2010 and 2017, while the most volatile currency or gold are located about 1% in the same period.
“This is more than just the behavior of a young currency and rapid growth. It is a structural fact “, experts from Citi. Here again they make mention of Satoshi Nakamoto, the unknown creator of bitcoin. “It is fair to assume that it is not an economist, because the fixed supply and fluctuating demand will not generate stable price behavior. Therefore, it will remain a highly speculative asset, “he added. This will cause structural volatility, analysts say, that bitcoin is not the winner in the coming wars criptomonedas.
2. The bitcoin is an economic waste. “You need large amounts of electricity, since its mining is very demanding,” stand out from the US bank. Moreover, in its report recalls that the mining of bitcoin uses the same amount of energy than it consumes Denmark, and even more will consider. “When the bitcoin mining significantly hit electricity prices, governments will have a new incentive to ban” indicate.
bitcoin daily chart (BTCUSD)
3. Not sure. Analysts believe that this currency is uncertain at present, but may be even more in the future with the advent of quantum computing. First, “there have been several hacks, not the bitcoin, but to portfolios where bitcoins are saved and this has led to the theft of bitcoin” they say.
A theft that qualify as “puzzling” because it seems difficult to “file a police report or ensure the loss of these valuables,” says Citi. Second, they indicate that the advent of quantum computing prints a greater security of this cryptocurrency risk as private keys can be created from public keys.
4. Facilitates illegal activity. “The bitcoin can facilitate the transfer of wealth from the real underground economy economy”, warn One of the main features of the criptomonedas is anonymity, highlights Citi, and this favors the criminal use of this digital currency in places like ‘dark-net’. Experts point out that this fact is demonstrated by noting that the largest number of operations bitcoin is done in countries with the highest rate of underground economy.
In addition to these four symptoms, Citi adds two more factors to be taken into account with this cryptocurrency. On the one hand, analysts believe that the bitcoin “shows classic signs of a bubble, similar to those who lived through the dotcom companies, manifested in its poor design”, note in their report. This possibility opens the door to state intervention in the problem of bitcoin. “The most vulnerable governments, such as Russia, New Zealand, Nigeria and Ukraine will intervene if its price hit $ 60,000,” conclude the analysts.