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“Shun bitcoin, bite at blockchain” says UBS

Bitcoin is a bubble and should be shunned, according to a to..

Bitcoin is a bubble and should be shunned, according to a top investment bank, but you should be "biting at blockchain" – the technology which underpins the cryptocurrency – predicting it to be an industry worth billions in the next decade.

"We do not see Bitcoin as a viable investment and instead see opportunities in blockchain technology," concluded UBS in an analyst note, warning investors to steer clear of "the biggest speculative bubble in history".

"We believe this has all the hallmarks of a bubble. High turnover, against limited real-world use, suggests that many buyers are seeking speculative gain. And while the supply of Bitcoins is limited, the broader stock of cryptocurrencies is not, with thousands of potential substitutes.

Read more: Two Brit entrepreneurs just made it easy to gift bitcoin for Christmas

"We don't advise clients either to invest in Bitcoin or to short it – on the principal that markets can remain irrational longer than you can remain solvent. Instead we advise investing in the underlying blockchain technology, which we expect to generate $300bn to $400bn of global economic value by 2027."

Global chief investment officer Mark Haefele added: "Predicting the peak is difficult, but all bubbles tend to end the same way – with a transfer of wealth from the many to the very fortunate few."

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