BoA Claims Bitcoin Is Slow And There’s No Good Reason To Own One

BoA claims Bitcoin is slow, not eco-friendly and there’s no good reason to own one according to a research report that we have in our latest Bitcoin news today.

BTC is impractical, volatile, and harmful to the ecosystem, the BoA claims. Titled “Bitcoin’s Dirty Little Secrets”, the report shows that there’s no good reason to own BTC unless you see the prices going up. The prices mainly go up when the bigger companies purchase huge amounts of the cryptocurrency and because the supply and emission rate are fixed, the demand for it can fluctuate and will create huge ripples on the market:

“Bitcoin has also become correlated to risk assets, it is not tied to inflation, and remains exceptionally volatile, making it impractical as a store of wealth or payments mechanism.”

Over the past few months, bigger institutional companies like Square, Tesla, and Grayscale were purchasing billions of dollars worth of BTC, and these according to the analysts, became the main force behind Bitcoin’s price rally:

“As such, the main portfolio argument for holding Bitcoin is not diversification, stable returns, or inflation protection, but rather a sheer price appreciation, a factor that depends on Bitcoin demand outpacing supply.”

The analyst asserted that the net inflows of around $93 million were good enough to drive the BTC price by 1% and in comparison, it requires $1.86 billion to move the price of gold. Apart from the price volatility, BTC is harmful to the ecosystem as the analysts argued. The verification of BTC transactions results in the same amounts of CO2 emissions:

 “Plus a $1 billion fresh inflow into Bitcoin may cause CO2 to rise by the equivalent of 1.2mn ICE cars. As hash power today is mostly in coal-fired Xinjiang, a link between prices, energy demand & CO2 means Bitcoin is tied to Chinese coal. Should prices rise to $1 million, Bitcoin may turn into the world’s 5th largest emitter, surpassing Japan.”

BTC’s complex infrastructure and high environmental impact result in slow transaction speeds and while the blockcahin is capable of validating 14,000 transactions per hour, Visa can process over 236 million. BTC is concentrated since 95% of the existing coins are held by 2.4% of the addresses:

 “In our view, the fact that such a small percentage of Bitcoin accounts hold most of the BTC in circulation makes this instrument impractical as a payments mechanism or even as an investment vehicle. It can also create social and governance issues.”