Dutch multinational bank ING says bitcoin won’t see large-scale adoption, as the cryptocurrency doesn’t have much to offer ordinary people with its basic features a significant hurdle to legalization.

“What they regard as key benefits, may actually be impediments to wider adoption… Users will include tech nerds, people obsessed about their privacy, people afraid of (hyper) inflation in traditional currencies, and people wanting to circumvent central banks for ideological or criminal reasons,” Teunis Brosens, Principal Economist at ING Amsterdam said in his Economic & Financial Analysis report.

Bitcoin is doomed to become a niche product for a select group of enthusiasts, according to the analyst, who doesn’t define bitcoin as “a normal investment asset” due to the absence of “the full faith and credit” of governments and central banks.

“Bitcoin proponents argue that volatility will fall as bitcoin adoption increases. That may be the case. Yet bitcoin remains money with fixed supply, lacking a central bank to manage price stability,” said Brosens.

The report highlights the highly speculative nature of the digital currency with its wild price swings of 10 or even 20 percent a day, and bitcoin almost doubling in value over the last month.

“Bitcoin’s high-value today is based on shaky foundations. The only justification for investing in bitcoin today is the assumption that others are willing to buy bitcoin at higher prices in the future,” the analyst wrote.

According to Brosens, most bitcoin investors do not understand the basics and the original goals of cryptocurrencies, and “don’t care much either.”

“A niche asset adopted worldwide could still have a substantial user base and hence value. It is therefore impossible to say whether the current bitcoin market price is “too high” for a niche asset,” the economist said.

“Then again, we join the crowd of analysts observing typical bubble characteristics: the idea of an asset that is new, revolutionary, almost magic – hard to understand, but let’s invest anyway because it will become huge. This idea is a form of “this time is different”-thinking. “Yes, we know about all those precious bubbles that popped, but bitcoin is really, really different.” We are not so sure,” Brosens concludes.

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