Analysts from the multinational investment bank, Citibank, have recently opined that bitcoin is on the verge of either becoming adopted on a mainstream level or collapsing from over-speculation.
A new report entitled “Bitcoin: At the Tipping Point”, ,” Citibank’s global perspectives and solutions, suggests that Bitcoin could become “an international trade currency” as it evolves.
Perceptions about what makes bitcoin important continue to evolve and create new opportunities while increasing its perception towards becoming mainstream,” the report states.
The analysts acknowledged that the massive interest shown by several large institutional investors like Tesla, Microstrategy, and PayPal is one of the major propellants for the digital asset gaining mainstream adoption.
Citibank report explain that bitcoin, in the role of a global trade currency, could be used by importers and exporters to pay for goods and services directly – simplifying the process of international trade. A decentralized cryptocurrency may be preferred to a Central Bank Digital Currency, it argues, because “no government or outside entity can take steps that might affect the supply of the trade currency, helping to decouple trade from political considerations.”
In the Report they wrote:
“There are a host of risks and obstacles that stand in the way of Bitcoin progress… Weighing the potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point… Bitcoin’s future is thus still uncertain, but developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.”
Several banks had actively shunned bitcoin in the past, arguing that it has no intrinsic value as it is allegedly backed by mere speculations from its proponents. However, increased adoption by institutional investors has been a big tailwind for bitcoin in the past year, the report states, but a range of potential risks could derail uptake.
