ABN Amro does not believe in bitcoin as a means of payment

ABN Amro does not consider bitcoin suitable as a means of payment. The bank will inform you about this in a report. Due to the volatile exchange rate of the currency, the limited number of coins and the high energy consumption, the bank also has doubts about bitcoin as an investment.

In the second part of its three-part analysis on cryptocurrencies, the bank takes a closer look at Bitcoin. For example, the bank believes that the longer Bitcoin exists, the greater the chance that the currency will continue to exist. According to ABN Amro, the coin also benefits from the network effect, whereby the increase in users strengthens the network even more. ABN Amro does suggest that there should be a clear ‘use-case’ that adds ‘value’ to the currency. “Otherwise, there is a real chance that this coin will remain a temporary phenomenon,” the report said.

After an internal analysis, the bank states that it considers Bitcoin unsuitable as a means of payment. “Bitcoin is not efficient and its limited share is a major limitation. Also the extreme volatility is detrimental to the currency so that it cannot be used as a means of payment. Something is successful when it is widely used by everyone. That happens when things become more efficient or has an added value for the user”, it sounds. Because this does not seem to apply to Bitcoin, according to ABN Amro, the bank expects that support for Bitcoin will level off and it will become more difficult for the coin to grow into a global means of payment.

When it comes to investing, ABN Amro states that Bitcoin is highly speculative as an investment. “The currency is very volatile and this makes it difficult to estimate a price movement.” According to the bank, this means that institutional investors are less inclined to invest in bitcoin and there is a risk of being banned by the government as an investment vehicle. The uneven distribution of the number of Bitcoin also increases inequality, according to the bank, and the extreme energy consumption may deter ecological investors.

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