Bank of America (BAC 1.35%) CEO Brian Moynihan is a well-known critic of bitcoin and other cryptocurrencies. Last fall, the banking titan said bitcoin was a untraceable tool for money laundering and other illegal activities. Traditional banks, like Bank of America, already do a great job of tracking and managing large money transfers around the world, leaving no room for a new-age digital currency to do the same thing.

This week, Moynihan doubled down on his bitcoin criticism. In a conference call with reporters after Wednesday's fourth-quarter report, the CEO told them he still isn't interested in bitcoin as an investment.

A pile of glittering gold coins, all embossed with the Bitcoin logo

Image source:

No bitcoins here, please

"We have limited our relationships and I think the thing speaks for itself," Moynihan said, according to Business Insider. "We've basically told people that they could buy it in other accounts, but not at Merrill Lynch. And so it's just our view that customers should be careful here."

He's walking the talk, too. Bank of America's Merrill Lynch investment services division did not provide access to bitcoin futures when the CME Group (CME 1.34%) opened up that market in December. Of course, buying and selling bitcoin tokens directly has never been an option for the bank's customers. Brian Moynihan can keep a straight face when he says that he doesn't believe in bitcoin as a serious investment, making it difficult for Bank of America's customers to get their hands on the digital currency.

...but we do love the technology it uses...

At the same time, Bank of America is doing more research into blockchain-based transactions than anyone else.

The company has applied for or received at least 43 blockchain patents so far, according to a report from intellectual property law firm EnvisionIP. Tied for second place, far behind Bank of America's dominant patent tally, Mastercard (MA -0.01%) and IBM (IBM 0.13%) claim just 27 blockchain patents each.

So it would seem that Bank of America believes in the technological underpinnings of the blockchain-based bitcoin, even if it doesn't subscribe to the leading cryptocurrency in its present form. a strictly platonic way, you know

I was able to find 42 of the bank's 43 reported blockchain patents, so it might be instructive to take a closer look at what's going on here.

The majority of Bank of America's patents in this area involve transaction processing, and are aimed at reducing fraud and risk in payment systems. One patent concerns offline storage of sensitive cryptocurrency data. Another is about identifying suspicious users and their shady dealings, and another contemplates a person-to-person payment system based on a blockchain network.

If bitcoin is ever mentioned by name, it's never the exclusive focus of the relevant patent, just an example of the coin types that might be used in the context of the patented process or technology. It's all about data management systems, never sinking to the level of cryptocurrency trading or bitcoin-specific asset management. This is all high-level stuff.

So I think it's fair to say that Bank of America has avoided endorsing bitcoin for any particular use, even as it's built a muscular portfolio of blockchain patents. You don't have to tie yourself to bitcoin in order to do useful research on next-generation payment technologies.

A plunging red charting arrow in front of a large Bitcoin token and some ones and zeroes

Bitcoin is hardly a risk-free investment. Image source: Getty Images.

Be careful out there, folks

Moynihan is not wrong when he reminds us that we "should be careful out there." The price of a full bitcoin recently plunged from $20,000 to $13,000 in the space of five days. A more recent crash dragged bitcoin prices down from $14,400 to $9,400 in two days. This is not a "set it and forget it" investment for most people. Nerves of steel are a basic requirement for owning this cryptocurrency, and the next crash could always be the final plunge from which there will be no recovery.

My own bitcoin holdings are mere play money, and I'm fully prepared to lose it all at any given moment. That's not a real investment -- just a small experiment that helps me learn more about cryptocurrencies in general.

And no, I can't blame him for saying one thing and doing another. Basic blockchain research is a far cry from exploring any cryptocurrency in particular. That research effort would still allow Brian Moynihan to look like a genius when blockchain transactions take over the financial world five years (or five decades) from now -- whether bitcoin dies in a ditch, or rules the digital currency market for the long haul.