Bank Of America Bullish On Bitcoin, Says Crypto Market Too Large To Ignore

Wall Street banking giant Bank Of America called blockchain the “most exciting new market in years” in a new research report.

What Happened: On Monday, BofA published a digital asset primer stating that the market has become too large to ignore.

“We believe crypto-based digital assets could form an entirely new asset class. Bitcoin is important with a market value of ~$900bn, but the digital asset ecosystem is so much more,” said Bank of America analysts Alkesh Shah and Andrew Moss.

The analysts acknowledged that while Bitcoin BTC/USD was designed to be money, it is now increasingly viewed as digital gold. Smart contract platforms like Ethereum ETH/USD, Cardano ADA/USD, and Binance Coin BNB/USD that enable the creation of decentralized applications have gained the most value, the analysts said. 

For some investors, Bitcoin’s high volatility could still be an issue, according to BofA. 

“Bitcoin's volatility is still high at nearly 70% annualized volatility; however, it is showing signs of maturing from when it breached 300% in 2013,” the analysts said.

Over the years, BofA said it has observed an evolving crypto market structure that has shown signs of maturing significantly since the early days.

“Digital asset market structure matured with bitcoin futures volume reaching $1.7tn (+304% y/y) and ether futures volume reaching $953bn (+471% y/y) in August.”  

Price Action: At press time, Bitcoin was trading at $49,884, gaining 4.64 % over 24 hours. Ethereum was trading at $3,444, gaining 3.43% over the same period.

Photo: Clay LeConey on Unsplash.