Bank of America (BofA) initiates coverage of Bitcoin and other cryptocurrencies amid growing institutional demand.
In July, several media houses reported that Bank of America created a new dedicated team to research cryptocurrencies and digital assets, marking Wall Street’s latest push to capitalize on investors’ increasing interest in digital assets. Earlier, it was also reported that BofA started to offer Bitcoin futures trading to selected clients.
Bank of America today launched its digital asset research with the publication of a report entitled “Digital Assets Primer: Only the first inning“.
Bank of America says that digital assets represent over $2 trillion in market value with over 200 million users. It also says that digital assets have the potential to transform every industry by improving efficiency and reducing friction across transactions. Hundreds of companies are forming within this new ecosystem, creating a new asset class.
The inaugural report covers the hot topics in crypto, including crypto tokens, smart contracts, stablecoins, CBDC, and Non-fungible tokens (NFTs).
The crypto research team at BofA is led by Alkesh Shah, head of Global Cryptocurrency and Digital Asset Strategy.
“Bitcoin is important,” “but the digital asset ecosystem is so much more. Our research aims to explore the implications across industries including finance, technology, supply chains, social media and gaming.”
Alkesh Shah
Candace Browning, head of BofA Global Research, said:
“Digital assets are transforming the way in which markets, businesses and central banks operate. Bank of America offers a market-leading global payments platform and blockchain expertise, and the addition of digital asset research further strengthens the depth and breadth of our offerings for investors.”
Corporation and Institutional Investors Want To Add Digital Assets To Their Portfolios
Responding to rapidly growing institutional interest in digital assets, almost all the leading financial institutions have started research coverage on this new asset class. In fact, there are many banks, including JPMorgan, Morgan Stanley, and Goldman Sachs, which offer digital asset services.
In March, Goldman Sachs restarted its cryptocurrency trading desk amid Bitcoin boom after a three-year closure. In May, the investment bank started trading with non-deliverable forwards, and protecting itself from volatility by buying and selling bitcoin futures in block trades on CME Group, using Cumberland DRW as its trading partner.
Commenting on the development, Max Minton, Goldman’s Asia-Pacific head of digital assets, said:
“Institutional demand continues to grow significantly in this space, and being able to work with partners like Cumberland will help us expand our capabilities. The new offering is “paving the way for us to evolve our nascent cash-settled crypto-currency capabilities.”
Last month, Standard Chartered’s Global Research team initiated coverage of digital assets with in-depth reports on Bitcoin (BTC) and Ethereum (ETH).
Publicly-traded Digital Assets Are Gaining Strong Institutional Demand
Institutional investors are taking more interest in publicly-traded digital assets. Crypto related stocks such as Marathon Digital Holdings, Riot Blockchain, Inc., and Coinbase Global, Inc. are part of research coverage of many leading brokerage houses.
In May, JPMorgan initiated coverage of Coinbase, a cryptocurrency exchange platform. In September, Stonegate Capital Partners initiated coverage on Riot Blockchain, Inc., a bitcoin mining company.