Bank of America has launched a study on digital assets that are “too big to ignore. In Fact, nearly three months after launching a crypto group, Bank of America has begun digital assets research coverage.
Besides, the bank emphasized companies ranging from payment processors and banks to utilities and media conglomerates in its coverage.
According to a Bank of America news release, digital assets are a $2 trillion market with 200 million users. And the sector is “too important to ignore”, according to a group of analysts led by Alkesh Shah in a recent research note.
The analysts stated, “We believe crypto-based digital assets might create an entirely new asset class”. They added, “We believe crypto-based digital assets could form an entirely new asset class”.
They also said:
“Bitcoin is important, with a market value of $900 billion. But the digital asset ecosystem is far more: tokens that act as operating systems, decentralized applications (DApps) without middlemen, stablecoins pinned to fiat currencies, central bank digital currencies (CBDCs) to replace national currencies, and non-fungible tokens (NFTs) allowing creators and fans to connect.”
Venture capital investments in digital assets and blockchain technology topped $17 billion in the first half of 2021, according to Bank of America, “dwarfing” the $5.5 billion invested in the same period previous year.
“These ushers in a new era of digital asset trading, services, and applications in a variety of industries, including finance, supply chain, gaming, and social media”, says the report. Despite this, we’re still in the early innings, according to the analysts.
Bank of America Establishes a Crypto Research Team
The only relatively close risk to digital assets, according to analysts, is regulatory uncertainty.
Bank of America identified stocks it already owns. Has a buy or neutral rating on, and has exposure to digital assets. PayPal (Nasdaq: PYPL) and Coinbase (Nasdaq: COIN) are at the top of the list. With Signature Bank, JPMorgan Chase, Morgan Stanley, and SVB Financial following closely behind.