One of the largest banks in the U.S., Bank of America Corp BAC, has recently stated that Bitcoin BTC/USD cannot serve as an inflation hedge.
In its recent research paper, the bank mentioned that Bitcoin keeps trading in tandem with the U.S. stocks despite being promoted as a haven asset.
In the report, Bank of America analysts Alkesh Shah and Andrew Moss said that cryptocurrencies often moves with the stock market, and Bitcoin has traded as a risk asset since July 2021.
In February, Shah said that Bitcoin would be less utilized as an inflation hedge in developed countries, except in countries with “inflationary environments,” where some investors may view the apex crypto as an inflation hedge.
On Wednesday, the Federal Reserve decided to hike the benchmark interest rate by 50 basis points for the first time in 22 years.
Bitcoin dropped below $36,000 on Friday, following a sell-off in U.S. equities. It has been down over 25% since the start of the year.
Gold, on the other hand, being considered the safest asset by some investors, is up 2.86% year-to-date.
At the time of writing, Bitcoin was trading at $35,810, down almost 7% in the last seven days.