Bank of America says digital currencies appear inevitable

Bitcoin is ‘Volatile’ and ‘Impractical’ says Bank of America

Some banks are saying that Bitcoin is now too important to ignore. On the other hand, some banks still think that Bitcoin is ‘Impractical’ and is not inflation to hedge. The first bank that I talked about is “Deutsche” and the second is “Bank of America”. They have bashed the cryptocurreny and have shown no interest in investing in the same. According to them, Bitcoin is not a great hedge to inflation. Their data shows that equities and commodities are a better hedge than Bitcoin. One of the most important reasons for the same is the volatility of bitcoin.

Statements of Bank of America

Bank of America CEO Brian Moynihan said his banks is ready to help out

According to the bank, the reason for owning BTC is not as a hedge to inflation or diversification but the price increase. They say that the main reason for this price increase is the demand outpacing the supply. Bank of America also showed data showing that 95% of the circulating Bitcoin is held in 2.4% of the addresses that make it impractical as a payments mechanism. Such kind of concentration also makes BTC volatile, and movement from these accounts can lead to huge price swings. But one thing to note is that many of these addresses are of funds that hold Bitcoins on behalf of thousands of users.

Bank of America also talked about one of the most controversial topics regarding BTC, which is energy usage. According to a report, Bitcoin has the fifth largest carbon footprint globally. And as a whole, there are many positives to Bitcoin, but Bank of America thinks that the negatives outweigh the positives. Another report citing the huge environmental impact of Bitcoin says that every $1 billion invested in BTC produces the same emissions as 1.2 million cars in a year. Obviously, there are many arguments in favour of Bitcoin, too, but now it has become more of an opinion kind of thing rather than a debate or discussion.

Things in favour of Bitcoin

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Analyst Alex Kruger talked about the allegations or comments passed by the Bank of America on BTC. He says that there is no real meaning in comparing the transaction speeds of Visa to BTC. This reply was to the comments made by BoA saying that Visa can process 236 million transactions per hour compared to a mere 1400 by BTC. Secondly, talking about the reason for owning Bitcoin, he said that one should look into the risk to reward ratio of Bitcoin. He also talked that even banking has lead to many criminal activities in the past, and there is no reason in comparing them both.

All in all, it seems that both of them are correct in their own perspective about BTC. But before investing in the same, it’s better to take a look at both sides of the coin.

What are your thoughts on the comments made by Bank of America on BTC? let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.

Also Read: SkyBridge and First Trust to launch their BTC ETFs.