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Bitcoin is Too Volatile, Impractical, and Fails as a Store of Value: Bank of America

While Morgan Stanley and JPMorgan have taken a more pro-BTC approach, another giant US financial institution, Bank of America, has issued a report bashing the asset. In it, researchers called bitcoin impractical, exceptionally volatile, and questioned its store of value status.
BoA Slams Bitcoin
Cited by the Financial Times, the Bank of America’s report on bitcoin took a stab at several attributes, including its highly volatile nature. The researchers claimed that this “exceptional volatility” makes the cryptocurrency “impractical as a store of wealth or payments mechanism.”
Furthermore, they asserted that speculators purchasing portions of the asset are the only reason behind its bull run that drove it from $10,000 to $60,000 in the span of several months. However, they believe that other asset classes have outperformed BTC in terms of a store of value capabilities.
“Broadly, we find that bitcoin has not been particularly compelling as an inflation hedge as commodities and even equities provide better correlation to inflation.
As such, we think the main portfolio argument for holding bitcoin is not diversification, declining volatility, or inflation protection, but rather sheer price appreciation, a factor that depends exclusively on bitcoin demand outpacing supply on a forward basis.”
Bank of America Building. Source: FinancialExpressBoA’s researchers also touched upon BTC’s environmental impact. They noted that the cryptocurrency, which requires a lot of energy consumption to be mined, uses as much electricity in a year as countries like Greece. This is something that Bill Gates also recently pointed out as a major …
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