Bank Of America Thinks Bitcoin Can Be A Key E-Commerce Tool

A number of online services and firms currently accept the virtual currency known as Bitcoin as payment. Bitcoins have also been in headlines with thefts of thousands of the virtual coins by hackers in cases like the Inputs.io breach last month. That theft saw $1.23 million in Bitcoins stolen.

There are a lot of Bitcoin users and companies that want the virtual currency to go mainstream. Bank of America has now stepped up and said that it believes Bitcoin can be a key tool for e-commerce. The value of Bitcoins continues to climb. As of this week, the Bitcoin was trading for $983.

A report issued by Bank of America's Merrill Lynch unit said that Bitcoins have a maximum market value of $1300 assuming they become a major e-commerce instrument. The report also says that Bitcoins need a significant "store of value" similar to that of silver.

"To the extent that Bitcoin offers users many benefits and efficiencies as a medium of exchange, this means it possesses some fundamental value that may increase over time as it gains wider use," the analysts said.

The report did admit that Bitcoin faces some significant challenges as well, such as potential regulation and volatility. The currency also faces risk of digital theft. There are currently over 12 million Bitcoins in circulation.

SOURCE: Bloomberg