Bitcoin is experiencing a “tipping point” after which it will either become the preferred currency in international trade or undergo a “speculative explosion.” Writes about it Reuters with reference to the new report of the investment bank Citi.
The spread of bitcoin among companies like Tesla and Mastercard could be the beginning of its mainstream expansion, analysts say. They note that the growing participation of institutions in recent times contrasts with the highly retail-oriented market of the last decade.
If businesses and individuals can access digital currencies from central banks and stablecoins through digital wallets, global reach and the ability to make payments with Bitcoin in commerce will increase significantly, Citi adds.
“There is a set of risks and obstacles standing in the way of Bitcoin’s progress,” the authors of the report write. “However, comparing potential bottlenecks with opportunities brings us to the conclusion that Bitcoin is at a tipping point.”
They also call Bitcoin the “guiding star” of the digital currency space, “the trajectory of which serves as a compass for the development of the broader ecosystem.” As one of the risks, analysts point out that another cryptocurrency could surpass and replace bitcoin. In support of their point of view, they note that the market capitalization of bitcoin in 2020 increased by 2.7 times, while the capitalization of altcoins – by 3.75 times.
In addition, Bitcoin may fall prey to changing macroeconomic conditions. Analysts admit that institutional investors have started buying cryptocurrency as a hedge against inflation, but a recovery in real economic growth could force them to move their capital again.
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