Bank of America: Bitcoin is important and the cryptocurrency industry is too big to ignore
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Answer Bank of America: Bitcoin is important and the cryptocurrency industry is too big to ignore
The expansion of the crypto market, and the increase in the prices and value of digital currencies made financial institutions and companies reconsider their attitude towards it.
Recently, the Bank of America published its report entitled:
Introductory digital assets: Round one only.
The report and research was led by Alaksh Shah, Head of Global Cryptocurrency and Digital Assets Strategy at Bank of America.
The bank has conducted in-depth research and analysis of the status of the blockchain and cryptocurrency industry from DeFi to NFT.
The report states that the cryptocurrency industry and decentralized finance services have grown too far to be ignored.Read:Find out why Enjin coin, symbol ENJ, rose more than 120 percent
Bank of America researchers note that nearly 221 million users have either exchanged cryptocurrencies or used a DeFi service, with steady growth.
Likewise, the increased participation of institutional investors is a clear indication that cryptocurrencies are much more than a passing phenomenon driven by retail traders.
Bank of America bullish on the growth of the crypto space outside Bitcoin:
Bank of America highlighted that during the first half of 2021, the DeFi arena received nearly $17 billion in funding from institutional investors.
Likewise, crypto mergers and acquisitions increased from $940 million in 2020 to $4.2 billion in 2021.
Mr. Alkesh Shah tried to maintain a neutral stance, asserting that the crypto market is more than Bitcoin, and added:
Bitcoin is important, but the ecosystem for digital assets is much larger than that.
Our research aims to explore the implications across industries including finance, technology, supply chains, social media and gaming.
The team that conducted the research and prepared the report also stresses that the way we interact with the world could change radically with the advent of blockchain technologies.Read:Project NANO allows you to send cryptocurrency via WhatsApp
Quoting from the main points of the report:
In the near future, blockchain technology could be used to unlock your phone, buy shares, a house or part of a Ferrari, get profits from borrowing, lending or saving, or even paying for gas or pizza.
Bank of America also highlighted the growth of NFT and how surprising it was for everyone.
The researchers confirmed their fear that large valuations of some NFT pieces such as chip art or the NFT of the crypto Loot could be a bubble affecting many investors who don’t know the risks they are taking.
This position contrasts sharply with previous reports in which the Bank of America described bitcoin as volatile, impractical, and of little use as a store of value.
In March 2020, the Bank of America issued a report in which it asserted that the rise of Bitcoin to $60,000 was primarily driven by speculation rather than the inherent advantages of the cryptocurrency, as its position at the time stated that:
Overall, we found that Bitcoin was not particularly compelling as an inflation hedge, as commodities and even stocks provide a better correlation with inflation.Read:Non-fungible “BAYC” tokens up 35% in the last 90 days and other NFTs depreciate
As such, we believe that the main portfolio argument for holding bitcoin is not diversification, reduced volatility, or inflation protection, but rather a surge in prices, a factor that depends exclusively on bitcoin demand outweighing supply on a forward basis.
But after the boom, Bank of America followed in the footsteps of other banks and created a research group dedicated exclusively to covering the field of cryptocurrency and the blockchain industry, and gradually began to change its approach to this emerging industry.
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