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He’s not sure which will come first. Jeanson largely agreed, suggesting that bitcoin’s recent drop was to be expected, adding that investors may see “more and more” volatility next year, given the lack of liquidity in the market.
A computer screen at the Cboe Global Markets exchange (previously referred to as CBOE Holdings, Inc.) shows Bitcoin cash and futures prices on December 19, 2017 in Chicago, Illinois.
“Yes, you can see throughout the various waves, there is always a retracement of 30 percent for the price of bitcoin,” said Jeanson.
“Like in any other market — we’ve seen that in equities, we’ve seen that in commodities — it’s quite a usual kind of a pattern to be honest.”
“I think there is going to be certainly some upside on this market,” he said, without providing a price forecast.
Jeanson believes that if one accepts the view that bitcoin could play a transformational role in the global economy, there’s an argument that it’s currently too cheap, not too expensive.
“We’re going to see more and more regulators taking the view that actually yes, this is positive for our local economy.”
The great payment debate
Jeanson expects more retailers and online businesses to begin accepting bitcoin in 2018, but debate rages over whether the volatile digital currency can be a viable means of exchange.
“We have our doubts that the government of any country will ever really be comfortable accepting any other currency than what they themselves can control,” according to Hartmut Issel, head of Asia-Pacific equities and credit at UBS Wealth Management.
“I don’t think bitcoin will replace the local currency. I don’t think that’s the objective,” replied Jeanson. “There is a coexistence system that could work very well together. I don’t see one without the other.”
Critics point not only to bitcoin’s volatility, but slow transaction speeds, security issues and the cost of “mining” bitcoin as design flaws that prevent it from becoming a digital substitute for government-issued money.
But Jeanson is optimistic that improvements to the network can resolve those issues: “We know that the scalability of the network at the moment is limited, but things will improve. That’s what we’ve been seeing, and it’s going to be a trend of this year.”