A new report from US-based Bank of America Merrill Lynch argues that bitcoin will go mainstream once banks start accepting it.
According to CNBC, the report outlines methods by which cryptocurrencies can be weighed against other commodities, singling out safety and liquidity as potential factors. The paper was penned by Francisco Blanch, who works as the bank's lead commodity and derivatives strategist.
In the report, Blanch opines that a watershed moment would come should banks begin taking bitcoin as a form of collateral for products. While this represents a "crucial hurdle," he went on to say that "we are not aware of any major institution that takes cryptocurrency as collateral at the moment."
Blanch drew a comparison between bitcoin and commodities such as gold and silver, noting that, in the past year, volatility in bitcoin markets was seen to fall below levels witnessed in markets for the latter precious metal.
"Bitcoin's volatility is very high compared to the euro, the yen or even gold," he wrote, according to CNBC. "But it fell twice last year below the volatility of silver, the world's currency for 400 years."
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