- The Queen’s bank, Coutts, has said it has no plans to invest in bitcoin, since cryptocurrencies have “nothing but sentiment” behind them.
- The bank said cryptocurrencies are vulnerable to government sanctions and could be a “bubble.”
- Bitcoin surpassed $12,000 on Wednesday, an all time high, after a week of ups and downs.
LONDON – Private bank Coutts said on Wednesday it has no plans to invest in bitcoin because the cryptocurrency has “nothing but sentiment” behind it.
Lilian Chovin, investment strategist at Coutts Bank – which is known as the bank of the Royal Family, as well as many of the UK’s wealthiest people – said cryptocurrencies “have nothing but sentiment backing them up, are vulnerable to government sanctions and lack the kind of data we look for to gauge value.”
As a result, she said, Coutts has no current plans to include cryptocurrencies in its investment strategies.
The bank said the development of blockchain technology is a “far more interesting” area to watch, and has the potential to disrupt any field where there is the need for secure, transferable records.
Bitcoin reached a high of $11,400 before falling nearly 20% to $9,200, then climbing to another all time high of $12,777 in early trading on Wednesday. These turbulent ups and downs, said Coutts, are feeding wider concerns that bitcoin, and the tech sector, could be a “bubble.”
Chovin pointed to the Bank of England’s deputy governor Sir Jon Cunliffe’s warning in November that investors should “do their homework” before investing in bitcoin.
However, Coutts said the tech sector is “still good value,” with innovative trends such as Artificial Intelligence and driverless cars, as well as strong Q3 results and a robust economic backdrop, supporting earnings growth expectations.
The US tech sector has been a significant outperformer this year, it said, rising by about 35% – almost double the return from US equities.