Bank of America released their latest crypto report this week, as Bitcoin returns north of $50K. BofA strategists Alkesh Shah and Andrew Moss described the crypto market as “too large to ignore” and that “there could be more opportunity than skeptics expect.”
Let’s take a bird’s eye view on key findings from the 140+ page report.
As BTC hangs tough above $50K, both BofA and our team’s internal perspective on Bitcoin inflows reflect strong institutional interest.
Additionally, beyond simply traditional financial institutions, Bank of America also cites the potential for further integration of blockchain technology in daily life. “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 report states. Of course, many different projects are already working on tools for some of these exact use cases, and a whole lot more.
Outside of existing economies ripe for reinvigoration, the report also calls out projects and firms that are becoming inherently native to the digital asset ecosystem. There has been ample growth across both of these categories, exemplified by the below chart showing mentions of digital asset language on earnings calls:
If there is one thing that is abundantly clear, it’s that digital assets are on major corporate radars, and as BofA states – “corporations aren’t risking being left behind.” These earnings calls included companies in information technology and finance, but also included consumer staples, real estate, health care, and more.
All The Rest: DApps, NFTs, And The Regulatory Battles
It’s hard to justify bucketing the immense growth of DeFi, Dapps, and NFTs all in one place while still giving the respective categories their fair shake. Nonetheless, that’s what we’ll do here to provide a brief recap on Bank of America’s thoughts on everything that isn’t a fungible token or straightforward blockchain project.
The report soberingly acknowledges the emergence of DeFi, despite it being seen as a continual threat to traditional financial firms like Bank of America themselves. BofA described Dapps as having the potential to bring financial services to nearly 2B unbanked individuals across the globe. What many crypto advocates and loyalists have been thinking and working towards is now becoming widely acknowledged by some of the biggest traditional institutions in the game.
When it comes to NFTs, the short stroke is that the sentiment reflects digital assets in general: Bank of America is bullish. The firm describes NFTs as “changing the way creators connect with fans and receive compensation.” Indeed, as BofA acknowledges, NFTs have immense potential in demonstrating ownership without any sort of middleman fee – and that this is substantial demand for this across a wide variety of verticals.
Finally, regulatory uncertainty was cited in the report as the largest near-term risk in the firm’s view, and understandably so. That regulatory risk may be exacerbated with stablecoins, however the report noted that despite less liquid reserves (which could lead to heightened regulatory scrutiny), stablecoins are “a waiting zone between fiat currencies and digital currencies, which could further accelerate adoption of the latter.” The report adds that central bank digital currencies (CBDCs) are a “when, not if” situation.
Bank of America only began it's crypto division earlier this year, however the banking behemoth has already released a bullish report on the crypto market. | Source: NYSE: BAC on TradingView.com
Related Reading | Grayscale Report Shows The Good, The Bad, And The Ugly Of The Cardano Network
Close The Curtain
In summary, we’re watching it all unfold in real time. The report states that over 20M U.S. adults own digital assets (roughly 14%) while an additional 19M+ plan on buying digital assets sometime this year. However, rising interests are just limited to individuals, but also live within corporations.
Furthermore, growth in ownership, interest, etc. doesn’t stop or start with Bitcoin. Bitcoin has amassed one of the largest market values on the planet, and in this case is the rising tide that is lifting altcoin boats. The BofA report dives into Twitter mention analysis, which showed that Bitcoin mentions decreased year-to-date (as of August) while many altcoin mentions increased. In the meantime, Bitcoin volatility has decreased relative to the early years, as increased adoption leads to more “diamond hands.”
Additionally, CBDCs are on the horizon. Bank of America approximates that countries encompassing roughly 90% of global GDP are reportedly exploring CBDCs. Meanwhile, engagement in NFTs and DeFi products are increasingly rapidly as well.
While acknowledging regulatory hurdles that the market will need to overcome, the BofA report doesn’t shy away from difficult topics either. Illicit activity with crypto has been a staple for bears, however BofA notes that digital assets associated with illegal activities have been cut in half compared to 2019.
In all, BofA is admittedly optimistic looking forward. As more traditional finance operations come to terms with crypto’s role across a variety of industries, adoption is only set to increase. Fasten up and hold on to your seats.
Related Reading | SEC Chair Gensler: SEC Will Not ‘Ban’ Crypto
Featured image from Pexels, Charts from TradingView.com
Financial institution of America launched their newest crypto report this week, as Bitcoin returns north of $50K. BofA strategists Alkesh Shah and Andrew Moss described the crypto market as “too giant to disregard” and that “there may very well be extra alternative than skeptics anticipate.”
Let’s take a chicken’s eye view on key findings from the 140+ web page report.
As BTC hangs robust above $50K, each BofA and our group’s inner perspective on Bitcoin inflows mirror robust institutional curiosity.
Moreover, past merely conventional monetary establishments, Financial institution of America additionally cites the potential for additional integration of blockchain expertise in day by day life. “Within the close to future, chances are you’ll use blockchain expertise to unlock your telephone; purchase a inventory, home or fraction of a Ferrari; obtain a dividend; borrow, mortgage or get monetary savings; and even pay for gasoline or pizza,” the report states. After all, many alternative tasks are already engaged on instruments for a few of these actual use instances, and an entire lot extra.
Exterior of present economies ripe for reinvigoration, the report additionally calls out tasks and corporations which are turning into inherently native to the digital asset ecosystem. There was ample development throughout each of those classes, exemplified by the under chart exhibiting mentions of digital asset language on earnings calls:
If there may be one factor that’s abundantly clear, it’s that digital belongings are on main company radars, and as BofA states – “firms aren’t risking being left behind.” These earnings calls included corporations in data expertise and finance, but additionally included shopper staples, actual property, well being care, and extra.
All The Relaxation: DApps, NFTs, And The Regulatory Battles
It’s arduous to justify bucketing the immense development of DeFi, Dapps, and NFTs multi function place whereas nonetheless giving the respective classes their truthful shake. Nonetheless, that’s what we’ll do right here to supply a short recap on Financial institution of America’s ideas on all the things that isn’t a fungible token or easy blockchain undertaking.
The report soberingly acknowledges the emergence of DeFi, regardless of it being seen as a continuing risk to conventional monetary corporations like Financial institution of America themselves. BofA described Dapps as having the potential to convey monetary providers to almost 2B unbanked people throughout the globe. What many crypto advocates and loyalists have been considering and dealing in direction of is now turning into broadly acknowledged by among the greatest conventional establishments within the sport.
In the case of NFTs, the quick stroke is that the sentiment displays digital belongings normally: Financial institution of America is bullish. The agency describes NFTs as “altering the best way creators join with followers and obtain compensation.” Certainly, as BofA acknowledges, NFTs have immense potential in demonstrating possession with none kind of intermediary payment – and that that is substantial demand for this throughout all kinds of verticals.
Lastly, regulatory uncertainty was cited within the report as the most important near-term danger within the agency’s view, and understandably so. That regulatory danger could also be exacerbated with stablecoins, nonetheless the report famous that regardless of much less liquid reserves (which may result in heightened regulatory scrutiny), stablecoins are “a ready zone between fiat currencies and digital currencies, which may additional speed up adoption of the latter.” The report provides that central financial institution digital currencies (CBDCs) are a “when, not if” state of affairs.
Financial institution of America solely started it is crypto division earlier this yr, nonetheless the banking behemoth has already launched a bullish report on the crypto market. | Supply: NYSE: BAC on TradingView.com
Associated Studying | Grayscale Report Reveals The Good, The Unhealthy, And The Ugly Of The Cardano Community
Shut The Curtain
In abstract, we’re watching all of it unfold in actual time. The report states that over 20M U.S. adults personal digital belongings (roughly 14%) whereas a further 19M+ plan on shopping for digital belongings someday this yr. Nevertheless, rising pursuits are simply restricted to people, but additionally dwell inside firms.
Moreover, development in possession, curiosity, and so on. doesn’t cease or begin with Bitcoin. Bitcoin has amassed one of many largest market values on the planet, and on this case is the rising tide that’s lifting altcoin boats. The BofA report dives into Twitter point out evaluation, which confirmed that Bitcoin mentions decreased year-to-date (as of August) whereas many altcoin mentions elevated. Within the meantime, Bitcoin volatility has decreased relative to the early years, as elevated adoption results in extra “diamond arms.”
Moreover, CBDCs are on the horizon. Financial institution of America approximates that nations encompassing roughly 90% of worldwide GDP are reportedly exploring CBDCs. In the meantime, engagement in NFTs and DeFi merchandise are more and more quickly as effectively.
Whereas acknowledging regulatory hurdles that the market might want to overcome, the BofA report doesn’t shrink back from troublesome subjects both. Illicit exercise with crypto has been a staple for bears, nonetheless BofA notes that digital belongings related to unlawful actions have been reduce in half in comparison with 2019.
In all, BofA is admittedly optimistic trying ahead. As extra conventional finance operations come to phrases with crypto’s position throughout quite a lot of industries, adoption is barely set to extend. Fasten up and maintain on to your seats.
Associated Studying | SEC Chair Gensler: SEC Will Not ‘Ban’ Crypto
Featured picture from Pexels, Charts from TradingView.com