The first cryptocurrency has reached a tipping point — it could either become a means of payment in international trade, or endure a ‘speculative explosion’. This is stated in a new Citibank analyst report.
In their view, news from companies like Tesla and Mastercard signals the start of Bitcoin’s entry into the mainstream. Active institutional investor interest contrasts with what was observed at earlier stages, the report’s authors noted.
They noted that broader use of digital gold in global commerce would be aided by transparency and the decentralised nature. Among the advantages, the experts cited low transfer costs.
“There are many risks and barriers on Bitcoin’s path to progress. Comparing potential difficulties with the opportunities leads us to conclude that the asset is at a turning point,” the report says.
The report authors named scalability and regulatory challenges as problems. Analysts acknowledged that institutional investors had begun buying the cryptocurrency as an inflation hedge, but a recovery in real economic growth could prompt them to reassess.
In November 2020, Citi researchers forecast that Bitcoin’s price could rise to $318 315 thanks to its status as digital gold in the 21st century.
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