A recent research report published by the Bank of America Corporation (BoA) indicates that cryptocurrencies’ long-term prospects are more promising than they have ever been.
Published on October 4 by the Bank of America subsidiary, BofA Securities, the report offers a thorough evaluation of the digital asset market, emphasizing innovation taking place in the decentralized finance (DeFi) and non-fungible token (NFT) sectors, among others.
According to the report, the cryptocurrency sector’s $2 trillion market capitalization is “too large to ignore,” and the digital asset ecosystem has expanded to cover so much more than just Bitcoin and other cryptocurrencies.
Specifically, the report describes how the emerging modern fintech as we see nowadays have been incorporating digital platforms that act as cryptocurrency operating systems, decentralized applications (DApps) that operate without technological barriers, stablecoins tied to fiat currency, and many more. The study also exhibits interest in non-fungible tokens (NFT) that enable a renewed digital, seamless connection between creators and fans.
In addition, the bank puts forward ideas such as central bank digital currencies (CBDC) that may replace national currencies.
According to BoA, when it comes to digital assets, they should not be intended as payments in the conventional sense. Their goal is to bring forwards a new computing paradigm that is accessible to everyone and is owned by millions of people across the globe.
Venture Capital Poured Money More Than Ever In Crypto
The report by Bank of America also stated that venture capital in the cryptocurrency and blockchain sectors has increased dramatically in 2021, with nearly $20 billion invested into this industry during the first half of 2021.
This figure alone is more than triple the total fund invested into this sector during the entire year of 2020.
It also highlighted the current acceleration in Bitcoin adoption, estimating that up to 220 million individuals across the globe would have traded cryptocurrencies or utilized a blockchain application by June 2021, which is an increase from just about 60 million in May 2020.
In contrast to prior technologies, it seems that the applications built on new blockchain and DeFi software architecture are growing at a quicker pace than those developed on earlier technologies. Anyone in a network can build an application or a project that guarantees consistency and trust, the report explained.
NFT Offers A Great Prospect, But Proper Risk Management Needed
When it comes to NFTs, BoA says that the sector’s rapid growth has caught even seasoned cryptocurrency users by surprise, adding that the OpenSea marketplace generated an astounding number of $2 billion in sales in this year alone.
Even while the research acknowledged the volatility of the NFT sector, it warned that heightened risks in this segment must be fully recognized before NFTs can achieve broad adoption.
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