Bitcoin will change transactions, but only for a few

Bitcoin will change transactions, but only for a few

Cryptocurrencies’ appeal will only ever be limited to select groups, according to 55 per cent of attendees at the 68th Annual CFA conference in Frankfurt.

However, 22.5 per cent said cryptocurrencies will completely change the way financial transactions are conducted and will significantly disrupt the business models of payment processors.

Just 17.5 per cent said they will not have much impact. Although international foreign currency transfers will become more efficient using cryptocurrencies, the remainder think these will have no impact because they will never be used by exchange traders or retailers.

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Bitcoin, a major cryptocurrency, has been quite popular in the last few years but is considered extremely volatile. According to itBit, a digital currency exchange, the past two weeks created a real opportunity for active Bitcoin traders after the market peaked at a new 14-day high of US$238 (£154.6).

During a presentation at the Future of Finance conference, itBit said there were three use cases for Bitcoin today. It can be used for retail merchant processing since the processing fees are less than 1 per cent, as compared to credit cards where the processing fees is between 2.5 to 3.5 per cent. These can also be used for remittances and by individuals who don’t have bank accounts.

According to itBit, a total of 25m households in the US are “unbanked” and around 65m are “underbanked”. The company also predicts that by 2018, almost 100 per cent of adults will have access to both smartphones and Bitcoin.

However, Bitcoin and other digital currencies come with a lot of risk and uncertainty. According to another poll conducted at the conference, 51.1 per cent see Bitcoin as a weak investment, with a further 17.8 per cent seeing it as very weak. Just 20 per cent perceived it as strong and 8.9 per cent as very strong.

The currency has seen a -30.36 per cent change in its price from year to date as of April 2015, according to itBit.