Bitcoin both as a medium of exchange and as a currency is in a unique position in its existence. It hit a new all-time high of nearly $ 60.000 in February 2021 and saw its biggest wave of institutional support at the end of 2020.
Therefore, both bitcoin investors and cryptocurrency enthusiasts in general are watching the market closely, as it appears to be on the verge of momentum towards a new maturity. Now, Citi analysts have said that bitcoin has reached its tipping point, which ignites further discussions about the future of the famous asset.
The turning point of Bitcoin
According to Citi analysts, this critical point reached by bitcoin will greatly contribute to determining its future. From here on out, bitcoin could undergo a speculative implosion or become a flagship currency for international trade.
In terms of mainstream usage, bitcoin has been boosted by investments from Tesla and Mastercard taking an official stance, according to the report. Just last month, Tesla bought a huge amount of digital currency ($ 1,5 billion in bitcoin at the quotation current) and Mastercard announced it would begin enabling crypto transactions on their platform.
This is very different from the days when bitcoin was shunned by the mainstream, as it was considered too anomalous and volatile. These announcements not only have positive financial implications, but also serve as a public stamp of approval for the rest of the traditional financial world.
For the first decade of its existence, bitcoin was primarily powered by retail investors and a close-knit online community. Now in its second decade, there is a greater influx of institutional investors and this will have a huge impact on the currency's survival into the future.
Will Bitcoin Overtake Gold?
There is also an increased importance of stablecoins and central bank digital currencies (CBDCs). If these too become more popular, the chances of bitcoin being used for international trade will increase exponentially.
There are many analysts and industry experts who predict that bitcoin, given its recent bull run, is on the verge of world domination. Despite this, there are others who think the bitcoin bubble will burst in due course. According to Citi's account, it could go both ways.
"Bitcoin's progress is being hampered by a number of risks and obstacles," say Citi analysts. "However, understanding the real loss of these potential obstacles in comparison with the opportunities offered leads to the conclusion that Bitcoin is at a turning point in its existence."
And now that traditional financial institutions have also decided to support the most important virtual currency in the world, what are your thoughts on bitcoin? Let us know in the comments below.