Written by Brenda Nakalema

Could Investors no longer be bullish on Bitcoin?

Cryptocurrencies have been known to cause a stir and more than enough acid reflux cases for some, yet there are …

Cryptocurrencies have been known to cause a stir and more than enough acid reflux cases for some, yet there are still many digital currency supporters. Despite this fact, there’s more criticism for the currencies, even from high profile individuals such as Axel Weber, Chair of Swiss Bank UBS. Alex claimed to be sceptical of payments being made using digital assets. He added that while the underlying technology on which the currencies are built shows promise, he rejects the idea that crypto could one day replace cash.

“We really like the technology behind it- blockchain technology, distributed ledger- and we do a lot of that trade finance as banks with that,” Weber said. “The crypto part is where I’m sceptical.”

According to the banker, the reason for the hype behind crypto is the belief that cryptocurrencies like Bitcoin could lead to the shift in global payments away from banks and cash to anonymous vehicles. Weber, who also served as the president of the German central bank, expressed similar sentiments as early as 2017, a time when Bitcoin was worth around $4500.

Cryptocurrencies- Bitcoin and Ether, have experienced a slump in recent times with growth appearing to pause- despite Bitcoin remaining up almost 250% from a year ago, and Ether rallying by nearly 800%, both currencies have failed to consolidate all-time highs hit last week.

Having said that, it ought to be remembered that cryptocurrencies are known to experience high volatility, with 10% intraday swings a norm in the crypto trading world.

Bitcoin fell a mere 1% last Wednesday to $60,600, having slipped below the important $60,000 barrier. Its all-time high hit $69,000 while Ether was down $4,250 before recovering to $4,900 last week.

Freddie Evans, a trader at British digital asset broker, Global bank said, “The market continues to edge lower as Bitcoin traded below the $60,000 support.” Evans asserted that the recent correction could be attributed to factors such as the recent strengthening of the US dollar and the signing of the infrastructure bill, which will introduce greater restrictions to cryptocurrencies.

Despite this, Evans is optimistic that the correction will not go on for long as multiple indicators suggest the bull market is yet to come to an end.

Even with all the scepticism and criticism surrounding cryptocurrencies, the latest move by Newyork developer Magnam Realestate of selling three retail condominiums with a rented out grand floor in Manhattan for $29 million in only Bitcoin suggests greater adoption of the currency.

Crypto enthusiasts envision a future where payments and money receipts are anonymous and free of the red tape used in traditional banking institutions. From the look of things, their dreams might not be too far off in the future, and might, in fact, become a reality sooner than most would think.