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Citi Bank reports that Bitcoin may transition to the currency of choice

Citi Bank reports that Bitcoin may transition to the currency of choice

Citi has issued a report claiming that Bitcoin could become the “currency of choice” for international trade in a few years. As per the report, Bitcoin is at the tipping point of mainstream acceptance or a speculative implosion. The U.S. banking giant has published a 108-page document titled “Bitcoin: At The Tipping Point“. Thus, evaluating the digital asset’s potential future in the global financial system. Analysts opined that Bitcoin could become “the currency of choice for international trade” by approximately 2028, depending on a few significant factors. 

The Citi report points to Bitcoin’s role as the world’s first digital currency. It states that it recently surpassed a $1 trillion market cap and has generated a whole ecosystem. As per the report, “Bitcoin is the North Star” that functions as a guiding light for decentralized finance and other sectors of the blockchain space. Moreover, the report claimed that there could be four stages that drive Bitcoin towards mainstream adoption.

Four stages that drive Bitcoin mainstream adoption

The first two stages concentrate on technology and censorship resistance when Bitcoin acts as a payment system or currency. The report also points to a stage that converges on deficiency and the digital hold thesis. Today, scarcity is arguably the most significant value proposition for Bitcoin, with various institutional investors conferring belief in the “digital gold” tale. The next stage would be a ” focus on globality and value exchange networks. As per the report, Bitcoin could be a “Global Trade Facilitator.”

The report also highlighted various evidence that shows Bitcoin is gaining traction. It involves high trading volumes on OTC desks and crypto exchanges. It also includes increasing interest among institutions. Additionally, the report said people could favor Bitcoin over a Central Bank Digital Currency (CBDC). It claims that no government or outside entity can take actions that might influence the trade currency supply, assisting in decoupling trade from political problems.

Notwithstanding Bitcoin’s success, the report emphasized various barriers that endanger the asset’s future. They incorporate scalability issues and interests over capital efficiency, security, insurance and custody, and ESG considerations from Bitcoin mining amongst institutional investors. Moreover, Citi’s analysts discussed that the next few years would be crucial in deciding Bitcoin’s future.

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