“Bitcoin is the most talked about cryptocurrency but Ethereum [the blockchain] has more features, including being more flexible” in its hosting of decentralized finance (DeFi) than the Bitcoin blockchain, according to Bank of America.

In its report, “Bitcoin’s Dirty Little Secrets,” published Wednesday, the second-biggest U.S. lender has a lot of things to say about the largest cryptocurrency, such as there being “no good reason to own BTC unless you see prices going up” and that its environmental record is poor.

The bank also calls central bank digital currencies “kryptonite for crypto” but it is intrigued by decentralized finance, which it says is “potentially more disruptive than Bitcoin.” The bank sees DeFi as a radical change to mainstream capital markets but, at $35 billion, has a long way to go compared to mainstream finance.

Read more: When DeFi Becomes Intelligent

DeFi refers to the fast-growing area of automated, blockchain-based trading and lending platforms that might eventually pose a challenge to banks, Wall Street firms and insurance companies. But not now, says the bank.

“Credit creation is one of the key motors of modern finance. As yet, DeFi doesn’t do anything like this,” the report states.

The Bank of America view is very different from last month’s prediction by JPMorgan Chase, the biggest U.S. bank, that rapid advances in digital assets could present an existential threat to traditional financial companies.

• “DeFi has seen a lot of innovation among exchanges. The key factor here is that with distributed ledger [technology], many of the functions, which are separate in fiat trading, are conducted on-chain,” Bank of America noted.
• DeFi services, from derivatives to asset management, were also mentioned as areas of growth in the Bank of America report.
• However, Bank of America highlighted issues about scalability, stating, “Ethereum may be more scalable than Bitcoin, but it, too, faces constraints in terms of speed, block size, the price of ether and so on.”
• “DeFi does, however, show the opportunity which [distributed ledger technology] offers to finance. We believe that one of the best differences against being disintermediated by DeFi would be mainstream finance grasping these opportunities.”