Bank of America released its report “Digital Assets Primer: Only the first inning,” headed by Alkesh Shah, president of Digital Asset Strategy and Global Cryptocurrency, presenting an extensive evaluation of the condition of the blockchain industry from cryptocurrencies to NFTs and DeFi.
The crypto and DeFi service industries have expanded to the point of being “too large to ignore,” says the report mentioned above.
BofA’s analysts note that almost 221 million users have used a DeFi service or traded cryptocurrencies with steady growth. Likewise, the enhanced participation of institutional investors is an obvious indication that cryptocurrencies are a lot more than a fleeting phenomenon driven by retailers.
Bank of America Sees Opportunity In The Crypto Space Beyond Bitcoin
During the first half of 2021, the DeFi community collected funding near to $17 billion from institutional investors compared to the $5.5 billion recorded during 2020. Mergings and purchases in the crypto space rose from $940 million in 2020 to $4.2 billion in 2021.
In an official PR, Alkesh Shah presented a rational position, insisting there be more to cryptocurrencies than just Bitcoin.
“Bitcoin is important, but the digital asset ecosystem is so much more. Our research aims to explore the implications across industries including finance, technology, supply chains, social media, and gaming.”
The group likewise insists that how we engage with the world might radically change with the arrival of blockchain technologies:
“In the near future, you may use blockchain technology to unlock your phone; buy a stock, house or fraction of a Ferrari; receive a dividend; borrow, loan or save money; or even pay for gas or pizza,”
In addition, Bank of America brought to light the surprise of NFT growth for everyone. Analysts were concerned by the significant estimations of some NFT pieces, such as NFTs from the crypto video game Loot or fractionalized artworks. They emphasized these gross valuations could affect investors that do not understand the inherent risks.
Times Change, So Do Opinions
This opinion contrasts with previous reports in which Bank of America defined bitcoin as unpredictable, impractical, and no good as a store of value.
In March 2020, Bank of America reassured that bitcoin’s surge to $60,000 was driven by speculation, not by the cryptocurrency’s intrinsic benefits:
“Broadly, we find that bitcoin has not been particularly compelling as an inflation hedge as commodities and even equities provide better correlation to inflation. As such, we think the main portfolio argument for holding bitcoin is not diversification, declining volatility, or inflation protection, but rather sheer price appreciation, a factor that depends exclusively on bitcoin demand outpacing supply on a forward basis.”
After bitcoin’s rise in price, Bank of America established a research team committed solely to covering the crypto space and the blockchain sector, changing its treatment of these emerging services over time.
Nathan recently got into crypto by investing in stablecoins/altcoins using an algorithmic trading strategy. Shortly thereafter, he began writing about blockchain technology and all things crypto. He has become involved in a number of crypto-related projects and continues to be passionate about all things crypto.