Bank of America announces the risk of cryptocurrencies

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Representatives of Bank of America (BofA) released a new report on cryptocurrencies, in which they stated that this asset class remained in the high-risk area. Separately, it was noted that the Ethereum (ETH) rate continued to fall and the trend may continue, as investors behave carefully, waiting for what will happen after the next network updates.

According to the bank’s analysts, digital currencies will continue to be in the status of risky assets as long as their price declines amid rising interest rates and the Federal Reserve’s (Fed’s) austere monetary policy. However, the report said that positive signs of a possible recovery in the market include the fact that the industry has seen an influx of stablecoins pegged to the value of real assets.

Last week, this indicator rose to $490 million on centralized exchanges, which is 58% higher than the same values ​​7 days ago. According to Bank of America experts, the top 4 stablecoins have performed well in recent weeks. At the same time, it was noted that the large inflow of Binance USD (BUSD) and the outflow of USD Coin (USDC) are likely directly related to the introduction of a new conversion algorithm on the Binance exchange.

The report states that real use cases such as payments and remittances continue to emerge every day, and data providers, including decentralized oracle networks, are expanding functionality.

Analysts at the financial institution also assured that more clarity is needed on the regulation of the decentralized finance (DeFi) sector.

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