Bank of America Has Lost Half of Its Active Crypto Users

The number of active cryptocurrency users at Bank of America has been cut in half due to the prolonged rout in the market, Bloomberg wrote Thursday (June 30).

As of May, Bank of America had under 500,000 crypto users. In November of last year, it had over 1 million. That initial surge came as bitcoin and some other tokens were hitting their record highs, but things have shifted dramatically.

Crypto prices are cratering and sentiments among users are no longer as rosy — bitcoin has lost 60% of its value this year and is now trending at around $19,000. Bank of America has acknowledged this, saying there had been a “great decline” in prices.

The bank has looked at an anonymized internal customer data, which showed the number of clients who’d invested in crypto assets either by sending or receiving such a payment. The data doesn’t show what specific transactions had been made, though.

The Bloomberg report noted that cryptocurrencies, like other risky assets, have fallen prey to a tighter monetary policy environment in which the Federal Reserve and other central banks have been raising interest rates to help slow down growth and dampen the rising prices.

The market capitalization for cryptocurrencies is now below $1 trillion, after sitting around $3 trillion in November of last year.

Crypto has been much-debated on many fronts, such as regulation and whether it is a legitimate form of currency. PYMNTS quoted ex-U.S. Acting Comptroller of the Currency Brian Brooks as saying that looking at crypto based on how it could be a surrogate for the U.S. dollar is an incorrect way to look at it.

Read more: Crypto Is Being Assessed Incorrectly, Says Ex-OCC Head Brian Brooks

Brooks said it would be more sensible to look at cryptocurrencies like internet stocks.

“Most of crypto is about replacing the centralized banking system with networks that allow user control versus bank control … the crypto assets that have prices are more like internet stocks,” Brooks said. “It’s more like you bet on Google if you think there’s going to be high internet traffic; if you short it, it’s that people are going to go back to the post office, right?”