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Coutts warns that bitcoin could be part of tech bubble

Digital_currency_bitcoinCoutts, the UK’s most exclusive private bank which counts the royal family amongst its clients, has warned that electronic currencies like bitcoin “have nothing but sentiment backing them up” and could be part of a tech bubble that will eventually burst.

Bitcoin this week reached an all-time high of more than $12,000 (€10,150), having started 2017 at less than $1,000.

Lilian Chovin, investment strategist at Coutts, said that the bank had no plans to use electronic currencies as investments because cryptocurrencies were “vulnerable to government sanctions and lack the kind of data we look for to gauge value”.

However, Chovin added that the development of blockchain, the distributed ledger technology behind many cryptocurrencies, “is a far more interesting area to watch”.

“This new technology has the potential to disrupt any field where there’s the need for secure, transferable records,” she said.

Yesterday the two main French financial regulators warned that bitcoin’s volatility could put the life savings of investors at risk.

Despite the launch of Europe’s first bitcoin mutual fund last month, a recent survey found that two-thirds of hedge fund managers have no intention of using it.

©2017 funds europe