'I come to bury Bitcoin, not to praise it': UBS
- It's time to "bury" bitcoin, UBS' Paul Donovan says.
- It was "obvious" that the bitcoin rally would end badly for people not "protected by any kind of regulation and got sucked into the process," he says.
Cryptocurrencies are nearing the end of the road, and it's time to do away with the digital coins, UBS Gobal Wealth Management's chief economist said.
UBS Paul Donovan, who has never been a fan of cryptocurrency, wrote earlier this week: "I come to bury Bitcoin, not to praise it."
"These things were never going to be currencies. They're not going to be currencies at any point in the future," he said Thursday on CNBC's "Fast Money." "They're fatally flawed."
Bitcoin received lots of love during the 2017 holiday season when it began rallying to nearly $20,000. But Donovan was skeptical then, warning that it could be "destructive" in the long term.
"Right from the start of the hike in late last year, it was fairly obvious that this was going to end badly, unfortunately, for some of the people who weren't protected by any kind of regulation and got sucked into the process," he told CNBC.
After peaking, bitcoin is now trading around $4,330. Overall, the cryptocurrency market has lost about $700 billion since reaching highs in January.
Donovan thinks the cryptocurrency could be in its "death throes" because losing 80 percent value "is not healthy." Government, he said, is "one of the main obstacles" to bitcoin, adding the idea of digital currency replacing the dollar "is quite a leap."
"The main problem with these things, the absolute fundamental flaw, is that they're never going to be a store of value," he said. "Every economist knows the store of value is about balancing supply and demand, and with cryptocurrencies, you cannot control the supply in response to the drop in demand."