Analysts at the bank argued that Bitcoin’s (BTC) “erratic price movements” devalued its place in investment portfolios, according to in an investor note quoted by CNBC.
The looming threat of government crackdowns across the globe puts significant downside pressure on future Bitcoin price action, according to the Investor note.
Also, coinciding with several negative regulatory moves from government agencies across the world is the recent BTC price plunge. The United States Treasury is looking to mandate reporting of crypto transactions above $10,000 to the Internal Revenue Service, per Cointelegraph.
Agreeing that investors see both assets as hedges against monetary debasement, the Société Générale analysts also touched on the Bitcoin and gold comparisons
However, beyond partial protection, the analysts identified positive price movements and fear-of-missing-out buying as the only claim to fame to both store of value assets, stating:
“The only potential reward to investors in Bitcoin and gold is from their positive price movement, which is essentially the only thing they have in common, apart from their ability to trigger rush buying.”
Despite the recent price troubles for Bitcoin, BTC is up 38% year-to-date and 312% in the last year. While some bankers may identify volatility as a bug, proponents like Mark Yusko, CEO of Morgan Creek Capital Management, see volatility as a feature of Bitcoin’s long-term value potential.
Speaking to CNBC on Thursday, Yusko argued that volatility was a necessary part of Bitcoin’s 223% per annum positive compounding capability over the last decade.