There’s no question that NFTs are valuable. Even kids are making millions of dollars producing and selling digital art. However, Wall Street has yet to catch onto the craze. That is, until Bank of America subsidiary, BofA Securities, recently weighed in saying that the cryptocurrency sector, including decentralized finance (DeFi) and non-fungible tokens (NFTs) have become too valuable to ignore.
According to the report, the cryptocurrency sector’s market cap currently sits at $2.15 trillion and the ecosystem, according to the securities firm, has grown to be much more than digital tokens like Bitcoin.
Why Bank of America Is Excited About DeFi & NFTs
Wall Street experts are pros at finding opportunities that have the potential to drive profits for those that get involved in them. So, the only reason these financial market pros get excited about something is because it has the potential to generate significant profits.
For Bank of America, the potential of the decentralized industry is nearly impossible to ignore for multiple reasons:
- DApps. First and foremost, the report pointed out the fact that decentralized tokens are acting like their own operating system, bringing decentralized apps, or DApps, to life. This pulls the middlemen out of the equation and allows for a new experience both for the user and the developer.
- CBDCs. The bank also pointed out the fact that central banks around the world are working to develop their own central bank digital currencies, or CBDCs, which have the potential to replace national currencies.
- Beyond Payments. However, for Bank of America, the real value of the DeFi and NFT space goes far beyond payments and monetary functions. In fact, the bank said that these digital assets are a new computer paradigm that offers a programmable computer that’s accessible everywhere and to anyone. Moreover, the decentralized network is “owned by millions of people globally.”
- NFTs. Finally, the securities firm pointed out that through NFTs, artists are able to create relationships they may have never been able to create in the past. Not to mention, these new-age artists are able to collect royalties on sales of their art far beyond the first sale that takes place, offering a new, robust stream of revenue for painters, digital artists, musicians, and more.
Venture Capital Diving In
Beyond the reasons above to be excited about the crypto industry as a whole, Bank of America took a look at what venture capital players think about the space. For those of you who haven’t played much on the financial field, venture capitalists fund up and coming projects in hopes of making profits when those projects come to fruition in the future.
There’s growing interest among these project capital providers.
In the first half of 2021, there was more than $17 billion worth of venture capital invested in the crypto and blockchain sector. That’s more than three times the $5.5 billion the securities firm says was injected in the sector in the entire 2020 year.
With so much money flying around in the industry, the untapped utility of the blockchain is beginning to be brought to life. Not only does the technology offer a way to seamlessly and securely track transactions, it offers the highest level of verification in any process whether you’re verifying that a transaction has been made or the fact that diamonds being sold aren’t blood diamonds.
Adoption Continues to Tick Up
For any industry to become a popular one, consumer adoption has to take place. After all, it doesn’t matter how valuable your product is, if nobody wants it, it’s not going to make any money.
In their report, BofA Securities pointed out the fact that crypto adoption is riding on highs and that the numbers are growing at breakneck speeds. In fact, in June of 2021, it was estimated that about 221 million people had traded cryptocurrency or used the blockchain in one way or another. That’s a massive number, especially considering the fact that in May of 2020, that number was just 66 million, pointing to more than 220% year over year growth in adoption as the community grows to epic proportions.
The Bottom Line
The bottom line here is simple. The DeFi and NFT space is growing at such a rapid rate that some of the leading experts on Wall Street are taking the time to dive in and share their opinions. At the same time, the sector is in its infancy, suggesting that there’s plenty of room for growth ahead. So, if you haven’t yet gotten involved, you’re missing out!