Spectacular implosion... or a serious rival to the dollar? Citi says Bitcoin has all to play for.
Bitcoin is at a “tipping point” that could go one of two ways: It becomes the preferred currency for performing international trade... or suffers a “speculative implosion.”
That’s according to Citi, which has released a new report examining the state of the cryptocurrency.
The U.S. investment bank says that BTC is currently undergoing a massive transformation — fueled by Tesla betting $1.5 billion on the digital asset, and Mastercard working on plans that will allow millions of its customers to make payments using crypto.
Describing why Bitcoin’s opportunity is so immense, Citi pointed to how central bank digital currencies and stablecoins are gaining momentum — meaning they could start to be used by companies and consumers in the coming years.
Analysts believe the fast nature of Bitcoin payments, coupled with the fact that the transactions are traceable, mean that it’s got the potential to be used regularly for cross-border payments.
But there are threats on the horizon: The U.S. would undoubtedly be nervous for BTC to undermine the dollar, and regulation would be inevitable. Demand for the cryptocurrency may also diminish as the economic environment begins to improve. Citi’s experts added:
“There are a host of risks and obstacles that stand in the way of Bitcoin progress. But weighing these potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point.”
Of course, some of the other challenges include the fact that BTC uses a lot of electricity… and the network can only handle about five transactions per second.