The past few weeks have shown that Bitcoin can be very volatile which makes it difficult to say that the asset can be used as a store of value, this is according to a report by the Bank of America (BoA). According to BoA researchers the coin is exceptionally volatile, this, it cannot be relied on as a means of payment or as a store of value.
The report further says that Bitcoin is experiencing fluctuations due to speculative activities. These activities moved it from $10,000 to over $50,000 in just a few months. So, the current price does not in any way reflect its actual value. The report asserted that other crypto assets are better stores of value when compared to Bitcoin.
The Bank of America also said that besides being incapable of being used as a store of value, mining the digital coin consumes a lot of energy. This view is also shared by Bill Gates who pointed out that it drains too much electricity before adding that the coin cannot be used as a value store.
Bank of America Claims Bitcoin is not “Decentralized”
While some crypto enthusiasts would claim the coin is decentralized, the report from BOA appears to rubbish this narrative. The bank pointed out that since 95 percent of the “digital gold” is owned by just 2.4 percent of holders, this makes it more centralized instead of being decentralized.
The researchers further highlighted the fact that larger accounts referred to as whales are continuing to accumulate which dispels the myth that it is decentralized. However, wallets having over 10,000 coins have reduced substantially in recent times, meaning that the asset is more evenly spread than it was a few years ago.
The observations of the Bank of America recent report is perplexing considering that other big banks like JP Morgan and Morgan Stanley have stepped up their plan to allow their customers to buy the leading crypto asset. Apart from those banks, there has been the entrance of other institutional stakeholders into the crypto space which is an indication of the acceptance of BTC as a viable store of value.