Leading global bank Citi believes Bitcoin is now at a ‘tipping point’, and the CEO of a major crytpocurrency exchange has said ‘it’s going all the way to the moon’. This comes as big companies such as Tesla, PayPal and Mastercard begin to show favour towards Bitcoin, while central banks have started exploring the potential to issue their own digital currencies, Unilad writes.
In a note dated Monday, March 1, Citi’s global perspectives and solutions team wrote that Bitcoin is now at the tipping point of mainstream acceptance or a speculative implosion’. Citi remarked upon the cryptocurrency’s incredible rise in value over the course of recent years and spoke of burgeoning interest from institutional investors as potentially laying out a path for mainstream success.
The increased use of Bitcoin as a payment tool, escalating availability of digital wallets, and notable institutional interest have all helped boost confidence in Bitcoin, and could lead to it one day becoming the leading medium for international trade.
There are a host of risks and obstacles that stand in the way of Bitcoin progress. 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.
Citi analysts described Bitcoin as being the ‘North Star’ of the blockchain ecosystem, noting that its underlying technology has created a completely new domain of the digital economy around it: Not only has Bitcoin increased in usage and value (hitting $1 trillion in market capitalization in February 2021), but it has created a whole ecosystem around it — including crypto exchanges, crypto banks, and new offerings into savings, lending, and borrowing.
The report notes bitcoin’s various advantages for global payments, including ‘its decentralized design, lack of foreign exchange exposure, fast (and potentially cheaper) money movements, secure payment channels, and traceability’.
These attributes, when combined with bitcoin’s international reach and neutrality, could well lead to the cryptocurrency becoming ‘the currency of choice for international trade’.
During an interview with Bloomberg, Jesse Powell, CEO of cryptocurrency trading exchange Kraken said: I think true believers will tell you it’s going all the way to the moon, to Mars, and eventually it’ll be the world’s currency.
Powell went on to state that a $1 million price target within the next decade would be ‘very reasonable,’ remarking, ‘you have to think it’s going to infinity'.
However, analysts have also warned that there are still various risks and obstacles that could lead to the bitcoin bubble bursting, remarking that widespread changes to the market will be needed before the mainstream adoption of bitcoin.
It’s thought the impact on institutional investment caused by the pandemic will remove a crucial support pillar for Bitcoin, with anticipated regulation and oversight in the aftermath of the pandemic potentially causing ‘many of the most innovative developers and entrepreneurs to exit the ecosystem’.
