Global Banks Release Successive Cryptocurrency Reports... Future Outlooks Diverge

Citigroup "Currency Preferred in Global Trade"
Commerzbank "Speculative Tool... Not Even Worth Analyzing"

[Image source= Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] The outlook on Bitcoin among major global banks is divided. This month, as large banks have been releasing official reports on cryptocurrencies one after another, U.S. banks generally show a positive view on cryptocurrencies, while European banks express negative opinions.

Citigroup released a 108-page cryptocurrency analysis report earlier this month. It is the first official report issued by a major global bank.

Citigroup analyzed that Bitcoin could be the most optimized currency preferred in global trade. However, Citigroup pointed out that concerns remain regarding Bitcoin’s capital efficiency, guarantees and custody, and environmental impact. Furthermore, it predicted that Bitcoin will soon reach a critical turning point to determine whether it will be accepted as mainstream or collapse as a speculative bubble.

Bank of America (BOA) Global Commodities Research Team also analyzed that "Bitcoin achieved the highest short-term returns this year and attracted investors' attention." However, like Citigroup, BOA expressed serious concerns about Bitcoin’s environmental impact. BOA pointed out that the annual energy consumption for mining Bitcoin is comparable to the energy consumption of the Netherlands.

BOA also analyzed that Bitcoin is not an appropriate hedge against inflation, explaining that supply is controlled by a small number of large Bitcoin holders known as "whales."

Lisa Shalett, Chief Investment Officer (CIO) of Morgan Stanley Asset Management, stated in a report published last week that "Bitcoin has almost reached the level where it can be classified as an investable asset," adding, "With regulatory frameworks established, improved liquidity conditions, and growing interest from institutional investors, it is poised to become part of mainstream institutional investors’ portfolios." She also noted that this process is similar to how the gold market emerged 45 years ago.

On the other hand, Germany’s Commerzbank devalued Bitcoin, stating it has no value. Commerzbank mentioned that Bitcoin is merely a speculative asset and that their analysts consider analyzing it a waste of time.

French asset management firm Amundi also released its first report on cryptocurrencies on the 22nd. Amundi pointed out that cryptocurrency prices could undergo sharp corrections once regulations are established.

Although future prospects are divided, it appears that global banks’ interest in cryptocurrencies is clearly increasing. This is because the Bitcoin market size has rapidly expanded this year. Currently, it is estimated that about 18.7 million Bitcoins are in circulation, with a market capitalization reaching $1.1 trillion.

This content was produced with the assistance of AI translation services.