According to a note authored by Francisco Blanch and two other strategists with the Bank of America, it takes $93 million worth of inflows to move the price of Bitcoin by 1%.

Comparatively, gold requires an inflow of at least $2 billion for its price to move by a single percentile. Meanwhile, $2.25 billion would be needed to move treasury bonds by the same percentage. This makes Bitcoin a highly volatile asset, susceptible to price manipulations from institutional players.

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The report supports the worries of BlackRock’s CEO Larry Fink who said that while Bitcoin could pass as a store of value, the leading cryptocurrency would have to prove itself. In his words, “[Bitcoin is] still untested, it has huge volatility moving in 5-6% increment with small-dollar investments moving it.”

The Bank of America researchers assert that despite being a trillion-dollar asset and having a market cap that is roughly 10% of gold’s, Bitcoin is twice as volatile as gold.

The analysts point to heavy accumulation from institutional players and Bitcoin rising illiquid supply as the reason behind this volatility. They said:

Looking at detailed blockchain records, we find that the largest addresses have not been selling in aggregate since the pandemic began.

In the end, the analysts called Bitcoin an “impractical” means of payment.

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