“I would simply not recommend this to the everyday investor.”
He went on to add that volatility and extreme, sudden fluctuations in price, coupled with little to no regulation, were what make Bitcoin an unwise investment option.
While multiple banks worldwide have displayed a willingness to adopt blockchain technology (Deutsche Bank, for example, is part of the Digital Trade Chain – a DLT platform set up by eight European banks for pan-European transactions), Bitcoin and cryptocurrencies in general are a whole different matter.
Central banks the world over, including the European Central Bank and the Central Bank of Russia, have refused to accept Bitcoin as a legitimate currency or financial instrument (although many have expressed interest in the possibility of state-issued digital currencies).
In addition, Bitcoin has been the subject of a great deal of criticism from finance industry bigwigs such as billionaire investor Warren Buffet (who dismissed the idea that Bitcoin could have any intrinsic value), and JPMorgan CEO Jamie Dimon (whose famously vicious attacks on Bitcoin have ranged from calling the digital currency a “fraud” to dubbing its supporters “stupid”).
However, despite the criticism, Bitcoin has surged in both popularity and price (Stephan observed that even German investors who were reluctant to put money in stocks were interested in Bitcoin). In 2017 alone Bitcoin has increased eightfold in value, most recently crossing the $8,000 mark. Many experts have predicted that Bitcoin is likely to hit $10,000 before the end of the year.
It is this very volatility that has scared off institutional investors; however, this could possibly change in light of recent developments, such as the CME Group’s upcoming introduction of a Bitcoin futures contract and Coinbase’s recent offering of a custodian service which will allow institutional investors to put their money into Bitcoin and other cryptocurrencies.