Bank of America deems Bitcoin the next big thing

In a new report, the bank says that the virtual currency could ultimately be worth $1,300 per coin and become a "major means of payment for e-commerce."

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
2 min read

It appears not only people in the tech world believe Bitcoin is the currency of the future -- one of the US' biggest banks also sees legitimacy in the virtual currency.

Bank of America published its first research report (PDF) on Bitcoin on Thursday saying that the digital currency could become a major contender to other types of online money-transfer providers.

"We believe Bitcoin could become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money-transfer providers," Bank of America wrote in its report. "As a medium of exchange, Bitcoin has clear potential for growth, in our view."

While there are other digital currencies, Bitcoin is probably the most well known. It's been around since 2009, but didn't really get going until 2011 when it was worth $2 per coin. By 2013, the currency had climbed to $20 per coin, and then jumped to $266 in April. Within the past few weeks, it had another price jump and is now hovering around $1,000.

Virtual currencies aren't regulated, which has caused governments some concern. The digital money can be manipulated or used to launder other types of money. It is also susceptible to hacking and allows people to evade currency controls with ease.

Bank of America echoed some of these same concerns in its report. The bank also said that the currency's volatility, which is based on speculation, could limit people's acceptance for it as method of payment; and its skyrocketing prices might cause it to get ahead of itself and create a bubble.

Nevertheless, Bank of America still appears to believe that Bitcoin could one day become widely used. The bank did some data crunching in its report and concluded that the total Bitcoin economy could ultimately be worth $15 billion, with each coin being valued at $1,300.