Regulators around the world are said to end up «bursting cryptocurrency markets like a bubble», making digital assets too risky and unsuitable for professional investors.
This is stated in a new appeal to clients from the Swiss bank UBS. Negativeness towards Bitcoin was also voiced by US Congressman Brad Sherman, although there are some interesting details in the case of his motivation for such statements.
By tradition, let’s start with an explanation. The attitude of representatives of different banks to the cryptocurrency industry differs significantly. For example, JP Morgan employees yesterday expressed their approval of the staking mechanism – that is, earning cryptocurrency by blocking a certain amount of coins for the required period. According to their forecasts, by 2025 this area will grow to at least $ 40 billion, that is, it will increase several times.
At the same time, employees of the Bank for International Settlements last week tried to convince clients that the purchase of cryptocurrencies by investors was allegedly not related to distrust of government currencies. According to them, the coins are used for speculation, and there is allegedly no question of mistrust in the government.
However, representatives of the British bank Barclays noted the most recently. They undertook to block customer payments in favor of the Binance cryptocurrency exchange, that is, in fact, to prevent the acquisition of digital blockchain assets. This is necessary to «help keep your money safe,» the agency said.
This is not the end of the banks’ dislike for decentralized assets. Here is another confirmation of this.
Why they don’t like Bitcoin
Here is a quote from a letter to customers from UBS in which they share their views on the digital currency industry. The cue is from Decrypt.
Regulators have demonstrated that they can and will fight cryptocurrencies. Therefore, we suggest that investors stay away [from Bitcoin] and build their portfolios around less risky assets. We have long warned that a shift in investor sentiment or regulatory action could lead to a bubble in the crypto market.
Recall that a bubble is an asset whose value differs significantly from its fair level. Usually, a bubble appears at a very fast pace, and the asset itself is in the field of view of many investors – including beginners.
It seems that now is the best time for bankers to criticize digital assets: the price of Bitcoin has fallen by almost 50 percent since it reached its all-time high, and the depression dominates the cryptocurrency market among investors.
However, such statements should not be taken at face value. At the beginning of the previous bearish cycle, many well-known financiers and banks also actively criticized Bitcoin, predicting a complete collapse of the crypt. As you can see, digital assets have not gone anywhere and are unlikely to ever disappear from the economy.
Throughout the history of Bitcoin, the death of cryptocurrency has been prophesied thousands of times. Until none of these predictions came true
Now let’s talk about the situation of cryptocurrencies in the United States, which last week in the US Congress was proposed to be made very difficult. This statement came from Congressman Brad Sherman, who has long been known for his negative attitude towards BTC. According to him, the crypt should be banned altogether, since it «is no better than playing the lottery or betting in a casino. » In addition, cryptocurrency advocates support tax evasion schemes, he said.
U.S. Congressman Brad Sherman
Why is Sherman so disliked by digital assets? The answer may be simple: some of the largest financial donors for his political campaign are well-known banking institutions.
Here is a list of them and the amount of donations provided by Fee.org.
- Capital Group Companies: $ 18,400
- Blackstone Group: $ 16,800
- BlackRock Inc: $ 11,250
- American Bankers Association: $ 10,000
- Capital One Financial: $ 10,000;
- Charles Schwab Corp: $ 10,000
- Credit Union National Association: $ 10,000
- Discover Financial Services: $ 10,000
- Deloitte LLP: $ 10,000.
Hence, it can be assumed that a lot of people in high circles of the banking sector are interested in Sherman’s negative rhetoric regarding the crypt. It is not surprising that the politician acts as their mouthpiece in Congress. That is why it is worth checking the information about Bitcoin on the part of its opponents three times – it may happen that the criticism of many of them does not even deserve the attention of an ordinary investor.
Bank of England building with mention of Bitcoin
We believe that this reaction of banks in relation to Bitcoin and cryptocurrencies in general is quite predictable. Since decentralized assets eliminate the need for intermediaries for people, the massive spread of cryptocurrencies can seriously affect the popularity of banks and their earnings.
Therefore, representatives of the traditional sphere of finance have probably decided to play ahead and spoil the reputation of cryptocurrencies right now. Moreover, for this they use arguments such as financing illegal organizations, money laundering and tax evasion, which were announced several years ago.
