Across The Border | Cryptocurrencies are a bubble, but blockchain is the future: analysts
Despite their frothy valuations, cryptocurrencies are unlikely to become a mainstream means of exchange. But blockchain, the underlying technology, is likely to flourish because of its wide-ranging applications
The sharp rise in cryptocurrency valuation in recent months is a speculative bubble and the future of digital money as a mainstream means of exchange is highly doubtful, according to UBS.
On the other hand, blockchain, the underlying technology, will become increasingly mainstream and is likely to have a significant impact on industries ranging from finance to manufacturing, health care and utilities. The technology could also add up to US$300 to US$400 billion of annual economic value globally by 2027, said a group of UBS analysts led by Sundeep Gantori in a recent research note.
The market capitalisation of cryptocurrencies has soared more than nine fold this year, thanks to investors’ growing interest in a type of digital currency that taps demand for secure and anonymous online transaction platforms which fall outside government control.
As of Monday morning, the total market cap of cryptocurrencies was US$174 billion, up about 880 per cent this year, according to CoinMarketCap, a cryptocurrency market tracker that follows more than 1,100 cryptocurrencies trading in over 5,500 markets worldwide.
The number was bigger than the market cap of either IBM or McDonald’s.
