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Bitcoin is too large to ignore and its just getting started - Bank of America

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(Kitco News) - The second-largest bank in the U.S. has jumped on the Bitcoin bandwagon, saying that the digital currency market is still in early innings and has the potential to transform financial market structures within the next 30 years.

In a report published Monday, analysts at Bank of America said that with a market cap of more than two trillion dollars and hundreds of millions of users worldwide, Bitcoin and the cryptocurrency market have "become too big to ignore."

The analysts added that the market value of the entire digital currency ecosystem is larger than the GDP of Canada, a member of the Group of 7, which represents the world's seven largest economies. Bank of America said that it is bullish on the long-term prospects of cryptocurrencies.

"It's difficult to overstate how transformative blockchain technology, digital assets and the thousands of decentralized apps that have yet to be created could potentially be. We expect rapid changes to the current market structure – new use cases will be discovered and others will be discarded," the analysts said. "Our view is that there could be more opportunity than skeptics expect. In the near future, you may use blockchain technology to unlock your phone; buy a stock, house or fraction of a Ferrari; receive a dividend; borrow, loan or save money; or even pay for gas or pizza."

While Bitcoin will continue to dominate the digital currency market, the analysts noted that the crypto-economy is bigger than just one asset.

"The digital asset ecosystem is so much more: tokens that act like operating systems, decentralized applications (DApps) without middlemen, stablecoins pegged to fiat currencies, central bank digital currencies (CBDCs) to replace national currencies, and non-fungible tokens (NFTs) enabling connections between creators and fans," they said.

Although the market's growth potential seems almost limitless, Bank of America also highlighted some growing risks. The analysts said that near-term government regulations appear to be the most significant concern.

"Regulatory uncertainty is the largest near-term risk in our view, but regulation may drive increased investor participation over the long term once the "rules of the road" for digital assets are established," the analysts said. 

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