Bank of America released the report “Dirty Little secrets of Bitcoin” in which the bank’s analysts criticized the cryptocurrency for its attractiveness to speculators and excessive energy consumption.
According to a new report from Bank of America, excerpts from which were published on
Twitter by the editor of the Financial Times, Kathryn Martin, the growth of bitcoin is supported by the inflow to the Grayscale Bitcoin Trust, which took place in May last year halving
Bitcoin and growing acceptance 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
The bank’s analysts argue that there is no compelling reason to own BTC other than to expect 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 exceptionally unstable, which makes it impractical as a means of saving or payment mechanism. Thus, the main argument for owning BTC is not diversification, stable returns, or protection from inflation, but rather a clear price increase-a factor that depends on whether demand exceeds supply.”
According to the bank’s analysts, bitcoin needs a cash inflow of $93 million to increase its price by 1%. In the report, Bank of America also mentioned the use of a large amount of electricity by miners ,itcoin. According to the bank, the energy consumption of the Bitcoin network can now be compared with this indicator for Greece.
Despite skepticism about bitcoin from some financial institutions, other banks are moving towards supporting the industry and launching cryptocurrency services and products. This week, it became known that the American investment bank Morgan Stanley, which manages assets worth $4 trillion, will provide
its clients with access to three funds based on bitcoin, but with certain restrictions.