In a report released by International Institute of Finance (IIF), a banking group which represents over 450 banks and financial organizations, it was outlined that the digital currency bitcoin’s future could be considered nothing short of limited in the current environment.
The report — released Thursday — noted that bitcoin’s legitimacy could be increased with consumers with growing regulation, and with the markets being fueled by speculation, the price is incredibly volatile.
“It is estimated that 50 to upwards of 90 percent of Bitcoin owners are speculators — thereby contributing to the substantial price fluctuations seen recently,” says the IIF. “If it persists, this remarkably high volatility will compromise Bitcoin’s capacity to function as a medium of exchange, as it deters most large companies from accepting the digital currency as a form of payment.”
The IIF is classifying bitcoin as a fiduciary currency with no intrinsic value.
“Despite Bitcoin’s ‘ingenious features’ it cannot provide a currency of stable value and its use as a broadly accepted medium of exchange appears limited,” the report concludes. (via Agence France Presse)