Bank of America experts recorded a more cautious behavior of crypto investors due to uncertainty with market trends.
According to Bank of America (BofA), crypto investors are increasingly choosing to work with stablecoins pegged to the US dollar or gold, as the volatility of digital assets is still too high, and the end of the crisis in the cryptocurrency market is not yet in sight. Also, experts say, investors are worried about the prospect of a protracted recession in the US.
Despite the fact that the price of most assets, including digital ones, has risen markedly since June lows, the unpredictability of the Fed’s actions is forcing investors to play more cautiously. If high interest rates persist for an extended period of time, the situation in the crypto industry could roll back, BofA analysts say.
Risk assets, including cryptocurrencies, are likely experiencing a classic rebound after a prolonged recession, analysts say. The bank conducted an analysis of the flow of tokens, which showed that the momentum from the purchase of digital assets is weakening, and investors are moving into a defensive position, stocking up on stablecoins. Some investors are suggesting that the current situation is a short-term respite before a longer recession.
According to experts, the Ethereum network merger scheduled for the end of September will be an important event for the cryptocurrency industry, as it should remove one of the main barriers to the adoption of applications built on the basis of the blockchain – to reduce network energy consumption by 99%, paving the way for the wider adoption of NFTs and stablecoins.
Earlier, the bank published data , according to which the number of active users of cryptocurrencies decreased by more than 50% compared to the maximum value of November 2021.
