Bank Of America refuses to recognize bitcoin as a safe-haven asset

by in Cryptocurrency News

Bank of America

Many analysts view bitcoin as a hedging tool. In their opinion, cryptocurrency is digital gold that protects capital from inflation.

However, Bank Of America analysts believe that BTC should be classified as a risky asset class and should not be called a hedging instrument. The report of the bank talks about the strengthening of the correlation between bitcoin and the S&P 500 stock index.

Cryptocurrency is highly dependent on the dynamics of the business activity indicator. The correlation has remained high since the middle of last year.

Bank Of America calls risky those assets that show increased volatility. These include both stocks and real estate.

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Nevertheless, it is worth noting that Bitcoin, on the contrary, has been correlated with gold since the beginning of the pandemic, but Bank Of America does not pay attention to this factor and insists that BTC should be considered solely as a risky asset.

In addition, the bank refuses to take into account the limited supply of a cryptocurrency, as another factor hinting at the nature of this instrument as a safe-haven asset.

The correlation with the stock market will be high, and bitcoin will continue to show an increased range of price fluctuations, investment bank analysts predict.