UBS’ Paul Donovan Claims Bitcoin Is in its Death Throes and Wants it “Buried”

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In a scathing November 26, 2018, blog post titled “I come to bury
Bitcoin , not to praise it,” UBS Group’s Global Chief Economist
Paul Donovan has called for the end of the cryptocurrency bubble.
Claiming that bitcoin is in its “death throes,” he attempted to
reason that a loss of over 80 percent is “not healthy” for any
economic asset.
“Evil Cryptocurrency Bubble”

Donovan said that economists have been predicting a massive
collapse of this scale for years, and now it has finally happened.
“The failure to balance supply and demand destroys value. Value
is being destroyed right now,” he added.
The post continued to describe the cryptocurrency as an “evil
bubble” that took money from a large pool of investors and
concentrated it in the hands of an elite few. According to Donovan,
the change in the distribution of wealth has far-reaching
ramifications for everyone that participated in the bubble.

Those that lost money in the process will be forced to spend
money differently, causing a “negative wealth effect.” Such
individuals will also be affected by loss aversion, which will
influence spending habits further down the line.
Donovan claims that B itcoin was doomed from the start simply
because its designers only excelled at math, and appeared to
know “nothing about economics.” Ultimately, the end of the
cryptocurrency bubble may turn out to be “good news” for those
that invested or were considering an investment in the industry.

“Getting skilled people to do something useful boosts the
economy,” he concluded.

In an interview on CNBC’s Fast Money segment, Donovan was
asked why he chose to publish the post at a time when bitcoin was
already down 80 percent. He responded:

“To be perfectly honest, I think anyone with a high school
education in economics has been a Bitcoin skeptic right
from the start. These things were never going to be
currencies, they’re not going to be currencies at any point
in the future. They are fatally flawed, and as a result, right
from the start of the hype late last year, it was fairly
obvious that this was going to end badly. Unfortunately,
some people who were not protected by any kind of
regulation got sucked into the process.”

Moving on to Blockchain Technology

Donovan was then subsequently asked for his opinion on the
hordes of people that have migrated from the banking industry to
cryptocurrency-related companies and hedge funds in recent
years.
He responded that most bubbles tend to attract people with
something “new and innovative in terms of technology.” According
to him, most people blindly believed in the cryptocurrency
ecosystem without having a proper grasp over the technology’s
fundamentals and limitations. He added:

“There were a lot of people who perhaps did not fully
comprehend what was going on with quantitative policy
and thought that printing money would create
hyperinflation, even though it does not. It’s creating too
much money [that causes this].”

Simultaneously, however, Donovan acknowledged that the
underlying distributed ledger technology presents an “economic
proposition” and, as such, different from what the cryptocurrency
market has to offer. A large number of cryptocurrency skeptics
have long held a similar position on blockchain technology ,
claiming that it can independently exist outside of digital
currencies.
The cryptocurrency community on Twitter were quick to retaliate,
however. Some users pointed out that institutional support has
never been better. At the time of press, the price of bitcoin hovers
around $4,200.

Source : https://btcmanager.com