Bank of America strategist Alkesh Shah has practically ruled out any meaningful rally in cryptocurrencies in the near term.
Cryptocurrencies, as well as other risk assets, “could be capped near term,” Shah told the bank’s clients in yesterday’s note.
“Token flows remain directionless with limited conviction as macro dynamics play out across risk assets broadly and finally a comprehensive US regulatory framework for digital assets doesn’t appear to be likely near term,” Shah added.
Shah previously wrote about digital assets acting like other high-growth, risky assets that are feeling the pain of high inflation and rate hikes this year.
“Currently, the risk of lower than expected profits are pressuring risk assets broadly.”
On the regulation front, Shah argues that “current proposal still don’t create a comprehensive framework.”
“We view a comprehensive regulatory framework as critical for mainstream digital asset adoption and expect regulatory clarity to drive institutional bank and individual engagement with this technology. But we believe the framework isn’t coming in the near term,” Shah concluded.
Bitcoin price is down over 1.5% today.
Source: Cryptocurrency - investing.com
