Guided by Alkesh Shah, the head of Global Cryptocurrency and Digital Asset Strategy, the Bank of America has just published the Digital Assets Primer. ‘The Digital Assets Primer: Only the first innings’ remains true to its title in the nature of its contents. The report admits that the cryptocurrency economy has now grown too large to be completely ignored.
According to research by the Bank of America, some 221 million people all over the world have used some form of cryptocurrency or DeFi services. These figures are also growing at a steady pace. Interestingly, the Bank of America has also noted that the number of institutional investors in decentralized finance has also grown rapidly. This proves that crypto is not just a retail trend. It is a new financial system that is here to stay for the foreseeable future.
In 2020, the total institutional contribution to the DeFi ecosystem was just $5.5 billion. But it has grown to $17 billion in 2021, in the space of just a year. Acquisitions and mergers in the DeFi world involved transactions worth $940 million in 2020. In 2021, that figure stands at $4.2 billion.
But Alkesh Shah differs from other experts in his field, claiming that while Bitcoin is definitely a leader of the decentralized finance economy, there is much more to the world of DeFi with avenues in social media, supply chain management, gaming, and more. Shah believes that blockchain can change the way our world operates. He foresees a future in which people use blockchain to buy stocks, pay loans, unlock their phones, or even buy a pizza.
The Bank of America report also spoke about the sudden boom in NFTs. But, it also clarified that many investors do not understand the high-risk factors involved in high-value NFT purchases like fractionalized art pieces.
But this new Bank of America report is very significant because even in its last report, it kept dismissing Bitcoin and cryptocurrencies as an unstable form of investment that was being run by a form of financial speculation.
However, once crypto prices started to surge, the Bank of America hired a new team of researchers dedicated to studying the crypto space. It has come up with its new report, which sees a lot of potential in the crypto decentralized economy.
