Financial Services Giant UBS Unlikely to Add Bitcoin to Portfolio Soon

At this moment in time, financial corporations throughout the world are divided into two teams: those who believe in the future of digital currencies, and those who do not. According to recent reports, the world’s largest wealth manager, known as UBS Group AG, is not yet ready to make any portfolio allocations to bitcoin, due to a couple of reasons.

According to the bank’s chief investment officer, bitcoin has not yet reached the critical mass it requires in order to be considered a viable currency that the bank would invest in. Additionally, Mark Haefele, the CIO of UBS Group mentioned that at this time, the total market capitalization of cryptocurrencies is not the size of smaller currencies that the UBS would consider. According to the CIO, some of the other reasons that the bank is not considering bitcoin investments at this time, include a lack of government oversight.

Apparently, UBS is also a critic of the volatility associated with the cryptocurrency, and the fact that it can act as a source of funding for illegal activities and terrorism. According to him, “All it would take would be one terrorist incident in the U.S. funded by bitcoin for the U.S. regulator to much more seriously step in and take action (…) That’s a risk, an unquantifiable risk, bitcoin has that another currency doesn’t."

Not long ago, the chief economist of UBS, Paul Donovan, make similar statements, thus comparing Bitcoin to the tulip mania in the Netherlands, thus essentially stating that the cryptocurrency is nothing but a bubble. Additionally, the CEO of UBS, Sergio Ermotti, stated that he is a lot more bullish on blockchain technology, rather than on digital currencies.

Regardless of these statements, Bitcoin has become a huge asset in terms of its size, therefore it can no longer be ignored by financial institutions and companies. With a new all-time high close to $8,000 per unit, its market capitalization has increased even further. If things go as expected, then chances are that we will see much higher values by the end of 2018. After all, $997 was the currency’s price in January 2017, and now that we’re reaching the year’s end, the digital currency has increased its value by over 700%.