Categories: Bitcoin Business

Bitcoin may be headed for a bubble

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On Thursday, bitcoin prices reached an all-time high, trading at $1,820 at this time of writing to beat last week's record of $1,461.

This meteoric rise is likely still being driven by the impetus coming from Japan — trading volumes soared on its bitFlyer bitcoin exchange due to major institutional investment into the platform in February, and the country legalized bitcoin as a currency on April 1. However, as prices continue climbing, prompting more and more people to buy in, questions are starting to arise as to whether the asset is headed for a bubble.

On Tuesday, a board member at the Bundesbank, Germany's central bank, issued a warning to the public not to buy bitcoin, saying the bank did not recognize it as a currency, and the cryptocurrency may be facilitating speculation. Investors could be getting ahead of themselves and ignoring potential risks — like the possibility of new regulations hostile to cryptocurrency. Such developments could spook investors and rattle the asset’s value.

Nearly every global bank is experimenting with blockchain technology as they try to unleash the cost savings and operational efficiencies it promises to deliver.

Banks are exploring the technology in a number of ways, including through partnerships with fintechs, membership in global consortia, and via the building of their own in-house solutions.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on blockchain in banking that outlines why and in what ways banks are exploring blockchain technology, provides details on three major banks' blockchain efforts based on in-depth interviews, and highlights other notable blockchain-based experiments underway by global banks. It also discusses the likely trends that will emerge in the technology over the next several years, and the factors that will be critical to the success of banks implementing blockchain-based solutions.

Here are some of the key takeaways from the report:

  • Most banks are exploring the use of blockchain technology in order to streamline processes and cut costs. However, they are also looking to leverage additional advantages, including increased competitiveness with fintechs, and the ability to use the technology to create new business models.
  • Banks are starting to narrow their focus, and are increasingly honing in on tangible use cases for blockchain technology that solve real problems faced by their businesses.
  • Regulators are taking an increased interest in blockchain technology, and they're working alongside major banks to develop regulatory frameworks.
  • Blockchain-based solutions will start to emerge in different areas of financial services. The most successful solutions will solve specific problems for banks and attract a large enough network to create widespread benefits.

In full, the report:

  • Outlines banks' experiments with blockchain technology.
  • Details blockchain projects at three major banks — UBS, Credit Suisse, and Banco Santander — based on in-depth interviews.
  • Discusses the likely trends that will emerge in the technology over the next several years.
  • Highlights the factors that will be critical to the success of banks implementing blockchain-based solutions.

Interested in getting the full report? Here are two ways to access it:

  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> START A MEMBERSHIP
  2. Purchase & download the full report from our research store. >> BUY THE REPORT

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