Analysts at Swiss firm UBS are warning investors that popular cryptocurrencies like Bitcoins could lose their allure just like Myspace and Netscape did earlier on in the social media and browser revolutions respectively.
According to Bloomberg, the firm issued this warning to its investors citing regulatory actions or if a better-designed version is launched to rival the existing ones.
“There is little in our view to stop a cryptocurrency’s price from going to zero when a better-designed version is launched or if regulatory changes stifle sentiment…..Netscape and Myspace are examples of network applications that enjoyed widespread popularity but eventually disappeared,” UBS strategist.
What this means: UBS suggests that a rival cryptocurrency backed by powerful Western Governments could eclipse Bitcoin when launched as it will attract more credibility and transaction value. Bitcoin is currently not owned by any government.
What the US Fed is saying
Bitcoins, the world’s most popular cryptocurrency with a 66.5% market share saw its price rise above $40,000 during the week before falling 8.9% to close just above $37,000. Cryptocurrencies are very volatile assets and is viewed somewhat negatively by most regulators.
Recently, the US Fed Chair, Jerome Powell, recently spoke on why the U.S central bank had no reason to rush into central bank digital currencies. According to him;
Since we are the world’s reserve currency, we actually think we need to get this right, and we don’t feel an urge or need to be first,” he said. “We effectively already have a first-mover advantage, because we’re the reserve currency.”
Powell also revealed that stablecoins were of high-level priority.
“We’ve been very focused… on potential regulatory answers for global stablecoins, in particular,” said Powell in response to a question about CBDCs, or central bank digital currencies.
“So that’s been a high-level focus, and that will continue to be a high-level focus because they could become systemically important overnight and we don’t begin to have, you know, our arms around the potential risks and how to manage those risks, and the public will expect we do and has every right to expect that… It’s a very high priority.”
Upshots
According to a report by Google, Nigeria has the highest interest in Bitcoin globally. The report claims Nigeria emerged the first amongst other countries around the world in Bitcoin searches on Google. Delta State has the highest level of Bitcoin interests on a state level in Nigeria, followed by Ebonyi, Ekiti, Anambra, and Osun.
Surprisingly Nigeria’s business capital, Lagos misses out of the top 5 as regards Bitcoin level of interest in Google.
So you advise that we not invest in bitcoin again?
We are tired of government backed currencies….What makes bitcoin thrive is because it’s decentralised and unanimous. What UBS is proposing will try to adjust what we have grown past. The currency will not receive massive adoption…it will soon fall below use just like MySpace..
Just create value and earn what ever the legal tender is be it fiat or crypto
Tons of things are wrong with this article. 1. Netscape is Mozilla Firefox; it’s still around, highly used and didn’t disappear. 2. It’s pretty naive to think that just because the currency is the current world reserve currency that it will continue to be after waiting and making a western digital currency. There are political consequences that will not work to the US’s advantage after weaponizing the SWIFT system. The next Bretton Woods agreement will not work in the favor of any government trying to make something better. Bitcoin is truly a world currency driven globally. Forbid your people from participating in it and all you’ll do is put your people at a disadvantage for the future world reserve currency. The true turning point for Bitcoin will be when the global governments come together on regulations, which will happen in the next four years; it’s inevitable.