- Bank of America is “bullish” on cryptocurrencies, claiming the digital asset “universe is too large to ignore.”
- The bank called blockchain “the most exciting new market in years.”
- BoA emphasized that while Bitcoin is important, there are a number of significant innovations happening in the form of altcoins.
A recent report by the Global Research Team at Bank of America declares that the bank is “bullish” on cryptocurrencies and the technology underpinning digital assets. In the report, BofA remarked on a number of blanket terms related to the digital world, including DeFi, Dapps, NFTs, and stablecoins.
In its newest blockchain industry report, Bank of America, the second-largest bank in the US with over $2 trillion in assets under management, has said the digital asset “universe is too large to ignore.” The bank mentioned that VCs have invested over $17 billion in crypto-related initiatives in the first half of the year, which shows the increasing interest among institutional investors.
Crypto assets witnessed exponential growth in 2020 and 2021. The total user base of the emerging industry has ticked up to exceed 200 million users worldwide while attracting over $2 trillion in market capitalization. Bitcoin, the first cryptocurrency, is still the dominant player, representing 43% of the entire crypto market with a market cap of over $900 billion.
The bank emphasized that while Bitcoin is important, there are a number of significant innovations happening in the form of altcoins. The report stated:
Bitcoin is important with a market value of ~$900bn, but the digital asset ecosystem is so much more: tokens that act like operating systems, decentralized applications (DApps) without middlemen, stablecoins pegged to fiat currencies, central bank digital currencies (CBDCs) to replace national currencies, and non-fungible tokens (NFTs) enabling connections between creators and fans.
Blockchain: The Most Exciting New Market
In the report, Bank of America called blockchain “the most exciting new market in years.” The bank added that many industries would integrate this technology into their core business model soon. The report said:
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.
The bank also touched on other aspects of the crypto world. It called DeFi and NFTs “the most innovation,” acknowledging that “DApps may bring financial services to many of the 1.7bn unbanked globally through a simple smartphone app.”
NFTs, which act as a deed of ownership for a digital asset, saw substantial growth in August. At the time, OpenSea, the leading NFT marketplace, processed over $3 billion worth of transactions. Appreciating this, BoA said NFTs “are changing the way creators connect with fans and receive compensation (and Gen Y & Z along with a few boomers are snapping them up).”
However, the bank didn’t gloss over possible barriers that stand in the way. Bank of America added that regulations and Central Bank Digital Currencies are two of the most notable risks ahead of digital assets. Just recently, China reiterated its clampdown on the crypto market, even banning metrics sites.