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Bank of America published its first research coverage focused on cryptocurrencies and other digital assets as they strengthen their involvement with the asset class, nearly three months after forming a crypto group.
"Digital assets are transforming the way in which markets, businesses, and central banks operate," said Candace Browning, head of BofA Global Research.
Cryptocurrencies Market Is Too Large to Ignore
According to a Bank of America research, led by Alkesh Shah, head of Global Cryptocurrency and Digital Asset Strategy, cryptocurrencies and decentralized finance services are “too large to ignore.”
“Bitcoin is important with a market value of $900bn, but the digital asset ecosystem is so much more: tokens that act like operating systems, decentralized applications (DApps) without middlemen, stablecoins pegged to fiat currencies, central bank digital currencies (CBDCs) to replace national currencies, and non-fungible tokens (NFTs) enabling connections between creators and fans.”
BofA’s researchers noted that nearly 221 million users have exchanged cryptocurrencies or used a DeFi service surpassing the $5.5 billion from the same period last year.
“This creates a new generation of companies for digital assets trading, offerings and new applications across industries, including finance, supply chain, gaming and social media. And yet we’re still in the early innings.”
Blockchain Could Change How We Interact
Bank of America says it sees crypto and digital assets more broadly as providing enticing investment opportunities through a “variety of lenses” which includes “tokens that act like operating systems,” applications powered by smart contracts, stablecoins pegged to fiat currencies, central bank digital currencies and non-fungible tokens.
The team further endorsed that the way we interact with the world could change radically with the advent of blockchain technologies:
“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.”