March 2, 2021 | AtoZ Markets – According to a new report by Citi, Bitcoin is at the tipping point of mainstream acceptance and could become the “currency of choice” for International Trade. The fierce ascend in recent months has caused big players to reassess the cryptocurrency.
Bitcoin bounces back with a 6%+ rise on Monday after a slight cooling off period in the last 7 days. The recent embrace from big Wall Street players such as Tesla, Mastercard & Amazon could set the wheels in motion for a “massive transformation” into the mainstream, stated Citi.
This year has been a wild ride for any crypto spectators or for those who invested in the digital asset. When the world first started grappling with Covid-19 in early 2020, Bitcoin took a nosedive in early March to below $4,000. Skipping 12 months on and the asset has skyrocketed over 460%. 2020 saw a striking evolution in Bitcoin adoption, which has given the crypto the stamp of approval across industries and been a main driver in the increased value of the asset.
Despite the growing interest, Bitcoin still faces risks and obstacles that can impede on its progress, cited the U.S investment bank’s global perspectives and solutions team. The future is still uncertain for Bitcoin, and mass adoption has been hampered by high volatility. Still, it has and continues to gain traction across emerging markets.
Citi further poised that for Bitcoin to claim the de facto currency of global trade, a status that is currently owned by the US Dollar will depend on several factors, such as wider institutional participation and closer oversight by financial regulators.
Since its inception the digital asset has been shunned by many financial institutions, doubting its intrinsic value and the “hype” that circulates the cryptocurrency. Nevertheless, the recent rally has caused big players to reevaluate. BNY Mellon, the U.S’ oldest bank recently said it would offer Bitcoin and other crypto services. Likewise, JPMorgan is also showing heavy interest in the digital asset.
The cryptocurrency market is known for its wild bouts of volatility. In just under a week markets have witnessed all-time highs of $58,000 and a bounce back of approximately $11,000 to $47,000. Despite the drop Bitcoin is still up over 60% on the year, and a small climb over 6% in the last 24hrs.
The current rally has been described as different to other bull runs, this is heavily influenced by the increased participation from institutional investors. First created in 2008 as a digital payments system to counteract the current financial system has since become a kind of “digital gold” that acts as a great hedge against inflation.
“Upgrades in the way the marketplace works would be required before broad institutional participation could be envisioned,” Citi said. “Such enhancements would move Bitcoin and the cryptocurrency space closer to the oversight and rules of traditional financial regulators.”
Furthermore, “weighing these potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point.”