Bank of America has published a report on Bitcoin and it is swimming against the tide as the bank throws shade at the world’s most popular crypto as just a vehicle for speculation.
The story has been picked up by many outlets at a time when interest in Bitcoin is rising rapidly, along with its price. Entitled “Bitcoin’s Dirty Little Secrets,” the analyst states:
“Bitcoin has also become correlated to risk assets, it is not tied to inflation, and remains exceptionally volatile, making it impractical as a store of wealth or payments mechanism. As such, the main portfolio argument for holding Bitcoin is not diversification, stable returns, or inflation protection, but rather sheer price appreciation, a factor that depends on Bitcoin demand outpacing supply.”
Meanwhile, Bitcoin purchases have been growing as more institutional money pours in and retail demand is rising.
Just this week, it was reported that Morgan Stanley is preparing products for its customers due to interest in BTC.
Of course, there is nothing wrong with speculation and most investors are speculating when they invest in more traditional assets. Additionally, a holder of Bitcoin may park it with a growing number of platforms that offer staking, thus turning it into a revenue-generating asset.
As well, the dollar printing presses are running at full steam. The US government is currently helicoptering billions of dollars into the economy as part of a $1.9 trillion “stimy” plan designed to boost the economy and, perhaps, influence voters. Bitcoin, on the other hand, has a hard cap. Volatility, yes. Devaluation by inflation – not so much.