Despite recent volatility, Bitcoin rose to all-time record highs in October. The cryptocurrency is regularly compared to assets such as gold, but some believe central digital currencies are the future for western countries.
Tom Montag, COO of Bank of America, said cryptocurrency reminded him of derivatives in their early days in an interview.
He was then asked whether banks are competing with cryptocurrencies, and dismissed the suggestion.
Mr Montag told Chainalysis CEO Michael Gronager: “I don’t view it as competition at all.
“I view it as just another asset class … and people like it for all sorts of different reasons.”
Mr Montag added he thinks it is “inevitable” the Federal Reserve will launch its own central bank digital currency.
Bank of America debuted its crypto research in October, noting that digital assets are “too large to ignore”.
The bank’s dedicated crypto research team was established in July.
Goldman Sachs said in May Bitcoin is an investable asset, not a competing currency.
JPMorgan also said in July that a lot of its clients see crypto as an asset class that they want to invest in.
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The Bank of America previously refused to adopt cryptocurrency, with reports saying executives “barred” the firm from managing crypto-investments.
According to the New York Times, “Bank of America’s chief executive, Brian Moynihan, barred the giant company’s wealth managers from putting any client money into cryptocurrency-related investments”.
A Bank of America spokesman, Mark Pipitone, told the outlet: “The bank sees potential in blockchain, and we’re currently a leading patent holder in the space with more than 160 patents.
“But we still haven’t found a use at scale to make the financial lives of customers and clients better.”
It comes as Bitcoin and cryptocurrency prices rocketed over the last month, with the combined crypto market surging towards a value of $3trillion (£2.223billion).
As of writing on Sunday November 7, Bitcoin is valued at £45,824.31, rising 2.4 percent over the last 24 hours.
On October 21, the digital coin rose to an all-time high value of £49,548.04.
Bullish bitcoin and crypto market watchers continue to predict prices will surge into the end of 2021.
Lukas Enzersdorfer-Konrad, chief product officer at Vienna-based bitcoin and crypto trading platform Bitpanda, told Forbes the coin’s recent volatility is “completely normal”.
He said: “Intraday volatility is completely normal after such a bullish month, but the higher time frame is looking solid for now.
“The crypto market is more integrated into the world economy every day which only shows how important it is for bigger institutions but on the other hand, is also under pressure from macro events.”