There are over 1,000 cryptocurrencies, bitcoin being the biggest by market capitalization, and many have seen huge rises in value over the past few years. Bitcoin for example is up over 470 percent year-to-date.
"We think the sharp rise in cryptocurrency valuations in recent months is a speculative
bubble," UBS wrote in a white paper published last week.
The investment bank said that it is "highly doubtful" that these will ever become mainstream currencies.
"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," the note said.