In an interview with Bloomberg, the chief investment officer of the world’s largest wealth management company, UBS Group AG, has declared his scepticism of Bitcoin and other cryptocurrencies. For Mark Haefele, the lack of government regulation over Bitcoin is a cause for concern, as is the size of market capitalisation of cryptocurrencies in general. He stated that the sum total of all cryptocurrencies is “not even the size of the smaller currencies” that UBS would allocate portfolio space to.
The UBS Group AG officer also stated that there were risks inherent with Bitcoin that did not affect other currencies. These made the company adding portfolio allocations to cryptos unlikely anytime in the near future. Haefele highlighted the damage that a terrorist attack funded by Bitcoin could do to the market, particularly if it happened on US soil:
All it would take would be one terrorist incident in the U.S. funded by Bitcoin for the U.S. regulator to much more seriously step in and take action. That’s a risk, an unquantifiable risk, Bitcoin has that another currency doesn’t.
He also mentioned the oft-repeated concern of high-finance folk that cryptocurrency could easily be used for money laundering. This, he feels, is a situation that’s “unlikely to persist forever”. Clearly, Haefele thinks that greater government regulation is on the way soon which could detract from one of the main value propositions of BTC.
He concluded with some general thoughts on investing in cryptocurrency, hinting that it was essentially impossible to determine where the top could be. For him, this is a negative quality as there is no clear exit point for investors. For proponents and supporters of cryptocurrency, however, the practically limitless upside potential is what attracts them to the space. In Haefele’s own words:
The thing that always strikes me about these, quote unquote, investments is not really when you would get into it but when you would get out of it. So how do you know when to get out of a bitcoin investment?