Bank of America released a report “Little Dirty Secrets of Bitcoin” in which a bank analyst criticized the cryptocurrency for being attractive to speculators and excessive energy consumption.
According to a new report by Bank of America, excerpts from published
tweeted by Financial Times editor Kathryn Martin, Bitcoin’s growth is being fueled by an influx of Grayscale Bitcoin Trust, last May’s Bitcoin halving and growing adoption among institutional investors.
Ice cold from BAML on “bitcoin’s dirty little secrets”.
Quite the contrast with Citi’s report pic.twitter.com/tOg3APa3mR— Katie Martin (@katie_martin_fx) March 17, 2021
Bank analysts argue that there is no compelling reason to own BTC other than expecting the price to rise in the future due to its correlation with other risky assets and volatility:
“Bitcoin has become correlated with risky assets, it is not tied to inflation and remains extremely volatile, which makes it impractical as a store of value or payment mechanism. Thus, the main argument in favor of owning BTC is not diversification, stable profitability or inflation protection, but rather a clear increase in price – a factor that depends on whether demand will exceed supply. ”
According to the bank’s analysts, bitcoin needs a cash flow of $ 93 million for its price to rise by 1%. The Bank of America report also mentioned the use of large amounts of electricity by miners, itcoin. According to the bank, the power consumption of the Bitcoin network can now be compared to that for Greece.
Despite skepticism about bitcoin by some financial institutions, other banks are moving towards supporting the industry and launching cryptocurrency services and products. It became known this week that the American investment bank Morgan Stanley, which manages $ 4 trillion in assets, will provide its clients with access to three bitcoin-based funds, but with certain restrictions.
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