The Citigroup Research arm has concluded that Bitcoin is at a “tipping point” thanks to massive institutional investment and an evolving regulatory framework.
According to a Citi Global Perspectives and Solutions (GPS) report, while attitudes towards cryptocurrencies vary, they have become an inspiration for the blockchain-based economy and created a new decentralized market.
Citi GPS analysts describe Bitcoin as the “North Star” of the blockchain because of its innovations that pioneered the ecosystem. Its lead over other cryptoassets will depend on how it can handle scaling issues and other complexities. It will also matter if institutional interest in the crypto asset continues to rise as life returns to business as usual following the COVID-19 pandemic.
“Decreased institutional enthusiasm could eliminate a key source of support for Bitcoin and possibly the broader ecosystem, thereby pushing it into a more speculative direction,” the authors of the report write. “The fact that Bitcoin has made significant progress in just over a decade makes it an outstanding asset, regardless of its future.”
Analysts speculate that Bitcoin could “become the currency of choice for international trade” due to its “decentralized design, lack of currency risks, fast (and potentially cheaper) money movement, secure payment channels and traceability.”
In December, Michael Corbat, CEO of the international financial conglomerate Citigroup, announced that he was working with several governments to develop digital currencies. Previously, the Managing Director of Citibank noted the similarities between the 1970s gold market and the current Bitcoin market. In his opinion, the price of bitcoin could reach $ 318,000 by December 2021.
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