Bank of America: ‘Bitcoin Can Become a Major Means of Payment’

In a 14-page document to its clients this morning, Bank of America currency strategist David Woo has made comments that may change how Wall Street views digicurrency bitcoin in the future.

“We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers,” writes Woo. “As a medium of exchange, Bitcoin has clear potential for growth, in our view.”

It’s certainly interesting to see such a large financial institution in the United States take this position. It does, however, seem like typical Wall Street jargon. The report contains seemingly arbitrary figures:

“Assuming Bitcoin becomes (1) a major player in both e- commerce and money transfer and (2) a significant store of value with a reputation close to silver, our fair value analysis implies a maximum market capitalization of Bitcoin of $15bn (1BTC = 1300 USD). This suggests that the 100 fold increase in Bitcoin prices this year is at risk of running ahead of its fundamentals.”

An interesting statement, but one with little to no merit, in our opinions. Woo is essentially stating that bitcoin is just about at the end of its line. What do you think?

[via Business Insider]