American investment bank Bank of America (BAC) referred to cryptocurrencies as risky assets in a report released Friday.
Investors are more cautious about development activities
According to BAC’s report, investors are now less and less responsive to news of network spikes. In the example given on Ethereum in the report, it was stated that its price continued to fall as investors took a wait-and-see approach to future upgrades.
On September 15, the Ethereum network switched from mining to a PoS mechanism. It has officially abandoned the energy-intensive, miner-based system it used before. The merge, which is an expected rise since 2015, was in the focus of investors until its release date. In the cryptocurrency market, the merge event was observed like a holiday. However, in terms of price, the expected effect of ETH did not occur.
Cryptocurrency prices fall as central banks raise interest rates
BAC also says that crypto prices are falling as the Fed raises interest rates to cool down inflation. According to Bank of America, cryptocurrencies continue to fall in value as interest rates rise. However, the positive sign is the amount of stablecoins returning to the market. Last week, these inflows jumped to $490 million, up 58% from the previous week. The report states that the reason for the boom in logins is “adoption of real-world use cases such as payments/remittances and increased functionality of real-world data providers such as decentralized oracle networks”.
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