Bank of America cryptocurrency investors halved
Bank of America's number of active cryptocurrency customers has more than halved amid a violent downturn in the digital asset market.
The number of bank cryptocurrency users shrank to less than 500,000 in May, from more than 1 million in November 2021, when Bitcoin and some other tokens reached all-time highs. Since then, cryptocurrency prices have plummeted, with sentiment among its proponents also tense. Bitcoin has plunged nearly 60% this year and is trading just above $19,000. The bank said there was a "dangerous fall" in prices.
“Cryptocurrency markets have been shaken by sharp drops in crypto prices, and the collapse of some stablecoins,” a Bank of America Institute team, including David Tinsley, wrote in a report.
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The bank conducted a study on anonymized internal customer data, which showed the number of customers who made investments in crypto assets by sending or receiving payments to or from the digital asset platform, although the data does not show the specific transactions that were made. Although Bank of America data does not provide a comprehensive view of all cryptocurrency users; However, it can reflect broader trends in the sector.
tough environment
Cryptocurrencies, like other riskier assets, have struggled in a tighter monetary policy environment, with the Federal Reserve and other central banks raising interest rates to slow growth and discourage higher prices. The market capitalization of cryptocurrencies has fallen to less than $1 trillion, from a peak of around $3 trillion in November 2021.
Amid these circumstances, sentiment toward digital assets has also subsided. Between April and June, Bank of America noticed a rise in the share of those who said they had not invested in the sector, and had no plans to do so, to 30% from 21%.
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However; The broader effects of the crypto market downturn may not be detrimental to the broader economy. Bank of America said crypto assets make up less than 1% of total US household financial assets, indicating that “relatively few people view crypto assets as a reliable long-term investment.”
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