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Citigroup says bitcoin is at a tipping point and the cryptocurrency could become âthe currency of choice for international trade.â The firm wrote in a report that âwe could be at the start of massive transformation of cryptocurrency into the mainstream.â
Bitcoin Is at the Tipping Point, Citi Says
Citigroupâs Global Perspectives & Solutions (GPS) team released a 108-page report Monday entitled âBitcoin At the Tipping Point.â
The Citi GPS report explains that âthe 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 âSpecific enhancements to exchanges, trading, data, and custody servicesâ that are âincreasing and being revamped to accommodate the requirements of institutional investors.â
Highlighting âthe 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:
These attributes combined with bitcoinâs global reach and neutrality could spur it to become the currency of choice for international trade.
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. âThis would take advantage of bitcoinâs 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 cryptocurrencyâs way to becoming a globally-used âtrade currency.â Among them are marketplace security â including tetherâs role to bitcoin â the environmental impact of mining, and institutional concerns, such as capital lock-up, insurance, and custody limitations. The report adds:
There are a host of risks and obstacles that stand in the way of bitcoin progress. But weighing these potential hurdles against the opportunities leads to the conclusion that bitcoin is at a tipping point and we could be at the start of massive transformation of cryptocurrency into the mainstream.
âBitcoinâs future is thus still uncertain,â the report additionally asserts, reiterating that âdevelopments 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 âLarge institutional investors and organizations are choosing to participate in and support bitcoinâ while âRegulators are beginning to lay the groundwork for the asset to potentially enter the mainstream.â
It further emphasizes that this progression occurring âin just over a decade makes bitcoin remarkable regardless of its future,â concluding:
Bitcoin is at the tipping point of its existence and the path forward from here may have broad and widening repercussions.
What do you think about Citiâs view on bitcoin? Let us know in the comments section below.
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