Bitcoin may be the reigning prima donna of the crypto market, but at least one big Wall Street bank is not impressed.A team of Morgan Stanley analysts led by James Faucette on Wednesday held up bitcoin BTCUSD, -1.93% as a poster child for speculation while downplaying its potential as a legitimate currency.In a scathing report, the analysts noted that the number of online merchants accepting bitcoin has dropped to just three, from five a year earlier. During the same period, the value of the cryptocurrency has soared more than 250%.“The disparity between virtually no merchant acceptance and bitcoin’s rapid appreciation is striking,” Faucette wrote.He blamed the lack of bitcoin’s appeal for retailers on hoarding by investors given its rapid appreciation, as well as higher costs and slow transaction times.But ironically, the main culprit may be its own skyrocketing worth.“The ecosystem has focused more on value speculation rather than the foot-leather-eating work of increasing acceptance — way easier to trade speculatively than convince new merchants to accept the cryptocurrency,” said Faucette.
The researchers are not quite up to speed. Bitcoin will live if the branded side chain concept takes off. Bitcoin needs S&L tech to price and relieve the ledger queues.
Regulated bankers face a choice. They can adopt a banker's coin, go full side chain with bitcoin, or stick to the tax dollar. The regular banks are confused and who knows what way they will turn, but the bitcoiners are hot on the trail of fully branded side chains.
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