UBS throws shade on bitcoin once more, this time through the words of its chief investment officer, Mark Haefele. UBS will not be adding bitcoin to its portfolio, UBS’s Haefele told Bloomberg in an interview.

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The UBS chief investment officer, Mark Haefele, voiced his concerns over bitcoin’s potential use for funding terror attacks, adding that the cryptocurrency has not reached the critical mass to be considered a viable currency to invest in for UBS.

“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,” Haefele told Bloomberg.

The total market capitalization of all cryptocurrencies is “not even the size of some of the smaller currencies” that UBS would invest in, Haefele said.

“The thing that always strikes me about these investments is not really when you would get into it but when you would get out of it,” Haefele said. “So how do you know when to get out of a bitcoin investment?”

UBS has always had a split view regarding cryptocurrencies and blockchain. On one hand, the investment bank expects blockchain technology to revolutionize the banking sector and the world. On the other, UBS sees cryptocurrencies as a dangerous investment, “a speculative bubble” that will never reach mainstream adoption.

“While we are doubtful cryptocurrencies will ever become a mainstream means of exchange, the underlying technology, blockchain, is likely to have a significant impact in industries ranging from finance to manufacturing, health care, and utilities,” UBS wrote.

Although cryptocurrencies have gained increased legitimacy over the past years, the UBS bitcoin stance remains bearish. “The need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption,” UBS wrote.

Last month, the Swiss banking giant’s CEO, Sergio Ermotti, said he is not necessarily a believer in cryptocurrencies. Merely days later, UBS global chief economist Paul Donovan compared bitcoin to the Netherlands’ 1637 tulip mania and the Weimar Republic’s hyperinflation

Bearish UBS bitcoin stance reinforced by CIO Mark Haefele – Image source: REUTERS

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