Citigroup says bitcoin is at a tipping point and the cryptocurrency could become â€œthe currency of choice for international trade.â€ The firm wrote in a report that â€œwe could be at the start of massive transformation of cryptocurrency into the mainstream.â€
Bitcoin Is at the Tipping Point, Citi Says
Citigroupâ€™s Global Perspectives & Solutions (GPS) team released a 108-page report Monday entitled â€œBitcoin At the Tipping Point.â€
The Citi GPS report explains that â€œthe biggest change with bitcoin is the shift from it being primarily a retail-focused endeavor to something that looks attractive for institutional investors.â€ The firm attributes the change to â€œSpecific enhancements to exchanges, trading, data, and custody servicesâ€ that are â€œincreasing and being revamped to accommodate the requirements of institutional investors.â€
Highlighting â€œthe advantage of bitcoin in global payments, including its decentralized design, lack of foreign exchange exposure, fast (and potentially cheaper) money movements, secure payment channels, and traceability,â€ the report details:
The report also explains that bitcoin has seen three different stages of focus so far: technological oddity, censorship-resistant money, and digital gold. It further predicts that we will soon see a fourth stage of focus as bitcoin transitions to becoming an international trade currency. â€œThis would take advantage of bitcoinâ€™s decentralized and borderless design, its lack of foreign exchange exposure, its speed and cost advantage in moving money, the security of its payments, and its traceability,â€ the Citi report describes.
While pointing out a number of remarkable developments in bitcoin over the past seven years, the report outlines a few obstacles in the cryptocurrencyâ€™s way to becoming a globally-used â€œtrade currency.â€ Among them are marketplace security â€” including tetherâ€™s role to bitcoin â€” the environmental impact of mining, and institutional concerns, such as capital lock-up, insurance, and custody limitations. The report adds:
â€œBitcoinâ€™s future is thus still uncertain,â€ the report additionally asserts, reiterating that â€œdevelopments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.â€
Meanwhile, the report notes that â€œLarge institutional investors and organizations are choosing to participate in and support bitcoinâ€ while â€œRegulators are beginning to lay the groundwork for the asset to potentially enter the mainstream.â€
It further emphasizes that this progression occurring â€œin just over a decade makes bitcoin remarkable regardless of its future,â€ concluding:
What do you think about Citiâ€™s view on bitcoin? Let us know in the comments section below.
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