Bank of America publishes crypto report

07 Oct 2021

Bank of America (BoA) has published a new report focused on cryptocurrencies entitled “Digital Asset Primer in Brief: Only the first inning.”

Compiled by Alkesh Shah, the report analyses cryptocurrencies, putting them in the context of other assets like equities and commodities.

Although Bank of America views Bitcoin – the world’s largest cryptocurrency by market cap – as the driving force behind the digital asset ecosystem, it believes smart-contract-powered dApps are the future. According to a Tokenist report, “dApps are capable of replicating the bank’s core borrowing, lending, exchange, and insurance business model.”

To highlight the burgeoning corporate interest in blockchain, BoA got together with its Predictive Analytics team to use Natural Language Processing (NLP). The findings revealed 161,322 instances of digital assets in earning call transcripts from Q1 2009 to Q3 2021.

By the end of the decade, half of the global population is forecast to be involved in the blockchain ecosystem and to own a type of digital asset. The principal reason for this is that the financial system can be completely tokenised and accessed on smartphones, so people who join the cryptoverse early will benefit the most, the report adds.

Moreover, even though Bitcoin could exceed the $1 million mark towards the end of the 2020s, early adopters will have more gains than latecomers. Indeed, the Bank of America report talks about the crucial driver of decentralised digital assets: “The nature of a decentralized blockchain network is that it’s trustless; you don’t need to trust, or even know, other network participants for the network to function properly. Our current monetary system requires us to trust banks, credit card companies and the Fed to maintain the system.”

In regard to performance, Bitcoin is the second-best performing asset year-to-date at 63%, according to the report, compared to another 10 assets within the same market cap range.