UBS: Cryptocurrencies Are In A ‘Speculative Bubble,’ Unlikely To Become A Real Currency

October 17, 2017 4:52 pm Published by

With 1,100 cryptocurrencies presently in circulation and a combined value of all digital currencies passing $175 billion, according to, UBS believes cryptocurrencies are in a “speculative bubble,” Business Insider reported Tuesday.

Last week, UBS warned clients it doesn’t think the recent bitcoin rally is supported by fundamentals, the report said.

“We think the sharp rise in crypto-currency valuations in recent months is a speculative bubble.” – UBS wrote to clients

UBS’s chief investment office’s note compared the current rush to invest in cryptocurrencies to the Dutch Tulip bulb bubble of the 17th century, the South Sea bubble and the dot-com bubble, Business Insider reported.

“A constant theme of bubbles is the ability of speculators to shout that dreaded cry “this time it’s different,” analyst Sundeep Gantori, UBS Wealth Management’s Global Chief Economist Paul Donovan, and their teams wrote.

“Logical arguments against the bubble can then be disregarded as speculators declare that the doubters simply do not understand that the world has changed,” the note continued, ‘The problem with this theory is that the world never changes that much.”

Explaining further, the UBS note said: “Like past bubbles, cryptocurrencies phenomenal rally is underpinned by the promise of future gains. Once blockchain technology is adopted or the projects funded through issuing cryptocurrencies come to fruition, early investors hope to profit. In other words, people are speculating on the future,” Business Insider reported.

With the characterization, UBS joins JPMorgan CEO Jamie Dimon as a vocal skeptic of the cryptocurrency sector. Other investment banks, like Goldman Sachs and Morgan Stanley, have been more bullish on the emerging sector., Jack Durschlag


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