Bitcoin (BTC) Tops $48,300 Levels As CitiBank Calls It ‘Currency of Choice’ For Global Trade
Staying under severe pressure over the last weekend, Bitcoin (BTC) is once agin out of dead woods. At press time, Bitcoin price is 7% up trading at above $48,300 levels with a market cap of $902 billion.
The world's largest cryptocurrency continues getting heaps of praises from some of the biggest financial institutions and joining the list this time is Wall Street banking giant CitiBank.
In a research note on Monday, accessed by CNBC, CitiBank noted Bitcoin is at the “tipping point” of mainstream adoption and one day could become “the currency of choice for international trade”.
“There are a host of risks and obstacles that stand in the way of Bitcoin progress. Bitcoin’s future is thus still uncertain, but developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion,” the banking giant noted.
However, Citi went on to stated that Bitcoin might have to go through several financial hurdles before seeing mainstream adoption. However, it also acknowledged that Bitcoin works better than the traditional payment systems.
“The entrance of institutional investors has sparked confidence in cryptocurrency but there are still persistent issues that could limit widespread adoption. For institutional investors, these include concerns over capital efficiency, insurance and custody, security, and ESG considerations from Bitcoin mining,” the bank added. “Security issues with cryptocurrency do occur, but when compared to traditional payments, it performs better.”
This marks a major shift in the approach of some major financial institutions in looking towards Bitcoin. Citi is not the first banking giant to warm up to Bitcoin. Last week banking giant JPMorgan also advised investors to gain 1% exposure to Bitcoin.
JPMorgan strategists including Joyce Chang and Amy Ho wrote: “In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio”.
The strategist further added: “Cryptocurrencies are investment vehicles and not funding currencies. So when looking to hedge a macro event with a currency, we recommend a hedge through funding currencies like the yen or U.S. dollar instead.”
In another major development, business intelligence firm MicroStrategy purchased Bitcoin at an average price of ~$45,710. As of March 1, 2021, MicroStrategy holds over 90,000 BTC with a total aggregate investment of $2.1 billion.
In another major announcement, Twitter announced $1.25 billion convertible note offering and speculations are ripe that just like MicroStrategy, Twitter also will invest it into Bitcoin.