Bank of America Merrill Lynch Says Bitcoin Akin to Saltbr>
Bank of America Merrill Lynch’s commodity and derivatives strategist Francisco Blanch said bitcoin’s volatility is starting to resemble that of gold or silver.
In a report issued yesterday, Blanch said bitcoin’s “crucial hurdle” is whether big banks and other financial institutions will take it as collateral. So far, no major institution has taken that step.
Beyond gold and silver, Blanch compared bitcoin to salt, which once was treated like a currency in ancient times. Given the lessons of history on how prior currencies have developed, Blanch indicated that bitcoin must meet three threshhold standards to achieve a status as a reserve currency: safety, liquidity and return.
The lack of a centralized decision-making authority, hacking, and outright scams are viewed as a recurring problem, Blanch said.
“In our view, cryptocurrency returns will mostly depend on the faith placed by individuals, corporations, and financial institutions on this emerging technology.”