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.”
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.