As bitcoin has been used to purchase illegal materials before, regulators around the world have kept an eye on the currency, even though they have no real control over it.
Mark Haefele, UBS Group AG Chief Investment Officer, told Bloomberg that it would not be committing funds to bitcoin.
He said: “All it would take would be one terrorist incident in the US funded by bitcoin for the US regulator to much more seriously step in and take action.”
Goldman Sachs has also made it clear they will not be taking on the cryptocurrency.
Still, despite China banning bitcoin from the country it still rose by more than 20 per cent, displaying it’s ability to survive without any authorisation.
Back in 2011 when the breach of Mt.Gox exchange occurred, a bitcoin exchange based in Tokyo.
Since then bitcoin owners have had to face the fact they are susceptible to hackers.
The Tokyo-based exchange filed for bankruptcy in February 2014 stating there was a high possibility that half a billion bitcoin had been stolen.
To make matters worse in 2016 Hong Kong exchange Bitfitinex suffered from $65million theft of the digital currency.
Cboe Global Markets Inc. and Nasdaq Inc are planning to offer bitcoin derivatives, as well as CME Group announcing it will be opening a bitcoin futures contract which will be available by December 18.
Still, this introduction of bitcoin futures could ultimately prove to be harmful to the cryptocurrency should clearing organisations come under stress amid the digital currency’s wild swings.
Thomas Peterffy, chairman of Interactive Brokers Group argued that allowing bitcoin futures on platforms that clear other derivatives would raise the risk of price gyrations that could “destabilise the clearing organisation itself”.
Coinbase recently failing to handle the traffic on the day bitcoin breached $11,000 shows the scalability problems that cryptocurrencies faces.
Mark Cudmore, Bloomberg macro strategist, told Bloomberg: “If this was a normal market, it would almost definitely retrace in the short-term because large barrier magnets had been taken out.”
Nobel Prize winner and economist Joseph Stiglitz said bitcoin “ought to be outlawed” because “it doesn’t serve any socially useful function”.
Bitcoin has caused a huge schism in the finical world with each side thinking they will be right.
Only time will tell if this crytocurrency will be boom or bust.