2021-10-8 19:00 |
This week, Bank of America (BoA) published a favorable crypto report detailing its analysis of the sector.
It states that cryptocurrency has become too large to ignore, adding that, despite the phenomenal growth seen to date, the industry is still “only in the first inning.”
The key takeaways spoke of increasing interest and adoption, especially regarding DeFi and NFTs. But it also discussed the risk posed by an uncertain regulatory landscape.
Digital asset ecosystem has attracted significant attention and accelerating investment. Increased adoption and new blockchain-enabled applications such as DeFi and NFTs fuel market growth. Risk: regulatory rules globally likely to affect every part of ecosystem, impacting growth and valuations.As the second-largest bank in America by total assets, the significance of this report cannot be overstated.
BoA states cryptocurrency has a bright futureThe BoA report states that despite “regulatory headwinds,” they remain bullish on cryptocurrency.
The report talks about an evolving landscape that has matured beyond Bitcoin’s store of value use case. On that, they foresee blockchain technology significantly transforming existing market structures.
“We anticipate significant growth as digital asset use cases move beyond bitcoin‘s store of value thesis to an industry characterized by product innovation, regulatory clarity, increased institutional participation and mainstream adoption.“
However, as a result of this, governments and regulators have started to pay more attention.
Recently, several prominent figures, including Coinbase’s Brian Armstrong, have come forward to voice their dissatisfaction with the lack of regulatory clarity, and some would add, unfair treatment at the hands of regulators.
A recent comment from JPMorgan CEO Jamie Dimon, in which he said, “Regulators are going to regulate the hell out of it,” leads many to think it’s game over for digital assets.
But, BoA has a more sympathetic take on regulation as it applies to cryptocurrency. They state that digital assets are complementary to, not competitive against, fiat currency.
The report goes on to state that clearer regulation will only accelerate adoption.
“Despite increased volatility as regulatory frameworks appear, clearer rules for digital assets and their applications may accelerate adoption.“
NFTs are one to watchAs well as detailing the influence of Bitcoin on the digital currency sector, the report also mentioned the role of alts, particularly how dApps and NFTs are a significant force in driving market structure change.
Interest in NFTs has spiked of late. This is thanks to several celebrities making big-dollar NFT purchases. For example, Steph Curry purchased Bored Ape #7990 for 55 ETH ($180,000).
Considering the hefty sums involved for in-demand NFTs, they have developed into a “digital flex.” Galaxy Digital CEO Mike Novogratz said NFTs had spurred a culture shift.
This was noted by BoA, who pointed out that August’s NFT sales were greater than for the whole of 2020.
“NFT sales were $3bn+ in August, up from $250mn in all of 2020, led by demand from celebrities, corporations and individuals.”
The mind boggles at what monthly NFT sales might hit during the second inning.
The post Bank of America report says crypto, DeFi are “only in the first inning” appeared first on CryptoSlate.
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