Bank of America slams bitcoin, says ‘there’s no good reason’ to own one

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Increasing institutional adoption has boosted the image of bitcoin to new record highs this year, but the cryptocurrency’s underlying technology has also piqued the interest of central banks seeking to create their own virtual tokens — a move that Bank of America warned may be detrimental for the cryptocurrency market.

Bank of America faced a counterblast from the digital currency community on Saturday after its censure of Bitcoin (BTC) from its latest research note made headlines.

“There’s no good reason to own Bitcoin unless you see prices going up,” Bank of America stated in its research note, titled “Bitcoin’s Dirty Little Secrets.” BOA, the second-biggest U.S. bank, said the crypto’s volatility makes it impractical as a store of value.

‘Kryptonite for crypto’

The U.S. lender also describes central bank electronic currencies as “kryptonite for crypto.” It is also intrigued by decentralized finance or DeFi, which it says is “potentially more disruptive than Bitcoin.”

BOA sees DeFi as a radical transformation to mainstream capital markets but, at $35 billion, has a long way to go compared to mainstream finance, according to CoinDesk.

Bitcoin was trading around $58,882.37 as of 4 p.m. Eastern Time, rallying 2.52% over the past 24 hours. BTC’s price struggled to rise higher after briefly hitting $59,000 when markets opened Friday in the U.S.

Investors continued to keep a close watch for the potential fallout from U.S. Treasury bond yields, which some market observers warn could result in a correction in risky assets from cryptocurrency to stocks.

Bitcoin network pollutes, BOA says

BOA’s research also slammed bitcoin’s impact on the environment, saying that its network releases around 60 million tons of carbon dioxide per year, which the bank said was the same as Greece.

Meanwhile, Morgan Stanley has become the first major banking group in the U.S. to offer its wealth management clients access to bitcoin funds.

In an internal memo, Morgan Stanley told its financial advisers it would provide access to three funds enabling ownership of bitcoin, CNBC said.

Image courtesy of Karolina Grabowska/Pexels

Jet Encila

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Jet Encila

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