Bitcoin: the "dirty little secrets" of the main cryptocurrency

Banks and the traditional financial system have a specific relationship to cryptocurrencies. Recently, Bank of America published a review called "Dirty Little Secrets of Bitcoin". In that matter, the main cryptocurrency was criticized because of its attractiveness for speculation. The second claim was the high level of energy consumption for its extraction.

According to the report, the growth of bitcoin over the past year was triggered by the influx of Bitcoin Trust to Grayscale, the halving of the main cryptocurrency which occurred in May 2020, as well as an increase in interest among institutional investors.

At the same time, Bank of America claims: there are no good reasons to own the main cryptocurrency. The only thing that can be expected from the purchase of bitcoin is an increase in its price. It is impractical as a means of payment or a means of accumulation due to its high volatility. Some correlation with risky assets and the lack of an inflation link is another negative.

Therefore, bitcoin will be bought not by those who seek diversification, stable profitability and protection of funds from inflation, but by speculators who expect the price to rise.

According to the Bank of America experts, the cryptocurrency needs an inflow of $ 93 million to increase the value of bitcoin by 1%.

The high energy intensity of the mining process is the second reason for the bank's skepticism about the main cryptocurrency. Now, according to experts, the bitcoin network needs as much electricity as the whole of Greece.

But, not all financial giants are so skeptical. Morgan Stanley, for example, said that it intends to provide its clients with access to three bitcoin funds. However, it will still introduce some restrictions.

Meanwhile, today, the open interest in bitcoin options has risen above $ 13 billion for the first time in history.

Bitcoin was able to move up from yesterday's consolidation range today. The main cryptocurrency has overcome the level of the previous historical value of 58340.66 and is on the way to Sunday's highs around the mark of 61657.98 (resistance at the level of 161.8 on Fibo Expansion).

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The material has been provided by InstaForex Company - www.instaforex.com

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