BANK OF AMERICA CALLS BITCOIN THE BIGGEST BUBBLE IN HISTORY
After rising to a high of almost $7,200 yesterday, the price of bitcoin reversed early today after Bank of America (BOA) released a report calling it the biggest bubble in history.
For months, BOA, the second biggest bank in the United States has been a vocal critic of bitcoin. In February, the bank warned that the currencies could pose a risk to its business because of their opaque nature. Later on, it barred clients from using its cards to buy and sell the currencies.
Yesterday’s report came a few weeks before the tax filing season starts out. Analysts believe that American investors owe more than $25 billion in capital gains taxes after last year’s gains. This selling pressure could have led to the weakness of the currencies in the past few weeks.
However, in reality, while bitcoin would cost investors billions of dollars, it would not match the trillions they lost during the dot com bubble and during the real estate bubble of 2018. Today, the total market capitalization of cryptocurrencies is about $259 billion. During the dot com bubble, investors lost more than $1.5 trillion.
Bitcoin is now trading at $6660, which is within the range it has been trading recently. The downward momentum the BTC/USD pair started has fizzled out and the pair is now in consolidation. With no major positive news, there is a likelihood that bitcoin will remain under pressure.