Bitcoin (BTC) has reached a “tipping point,” according to a report from Citi, says Reuters.
According to the report, the flagship cryptocurrency, BTC, could become the preferred medium for international trade or face a “speculative implosion.”
In the last decade, bitcoin has predominantly been championed by retail investors. However, bitcoin has been increasingly seeing adoption on behalf of institutional investors, such as Tesla and Mastercard.
This increasing institutional acceptance could lead to a “massive transformation” into the mainstream for BTC, Citi said. Such adoption has already seen BTC’s price rise tenfold from $4,700 in March 2020 to its current price of around $47,000.
BTC Optimally Positioned
According to the Citi report, wide-scale adoption of bitcoin would depend on mainstream finance’s acceptance of digital currencies and wallets. For instance, some central banks have intentions to issue digital currencies and stablecoins.
If these began appearing and individuals and businesses began using them via digital wallets, BTC would be “optimally positioned” to become the preferred currency for international trade, the report said. This is due to BTC’s already global reach, traceability, and capacity for quick payments.
However, for BTC to displace the dollar as the de facto currency of world trade, it would require market changes to enable broader participation and clearer oversight from financial regulators. Macroeconomic shifts could alter the demand for BTC in the meantime, the report added.
“There are a host of risks and obstacles that stand in the way of bitcoin progress,” Citi analysts wrote. “But weighing these potential hurdles against the opportunities leads to the conclusion that bitcoin is at a tipping point.”
Recent BTC Movements
February saw BTC breach the $50,000 threshold for the first time, peaking at $58,413 on Sunday, Feb. 21. Citi attributed this surge to the growing perspective that BTC can act as a hedge against inflation, an argument shared by MicroStrategy CEO Michael Saylor.
However, BTC’s price took a dive over the course of last week, hitting a low of $43,813 on Feb. 28. Citi analysts cite skepticism over the sustainability of such a high price level as the cause for the correction. Bitcoin is currently trading around $48,000.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
