Bitcoin (BTC) is at a turning point in its history, according to analysts from US investment bank Citi. The bank estimates that the leading cryptocurrency could become the currency of choice for international trade within 7 years.
Bitcoin a Potential Currency for International Trade
Citi bank made this observation in a 105-page report titled “Bitcoin: At the Tipping point.”
The report traces the evolution of Bitcoin as a reserve of value and currency. Citi analysts opined that Bitcoin is likely to become the currency of choice for international trade from the introduction of the document.
The reports highlighted the significant benefits of Bitcoin for global payments, including its decentralized design, fast (and potentially less expensive) money movements, secure payment channels, and traceability.
The researchers believe that Bitcoin features combined with its global reach and neutrality could achieve international currency status within seven years.
“Bitcoin is also emerging as the ‘pole star’ in the digital goods space and is a compass for the evolution of the cryptocurrency ecosystem,” Citi analysts note.
A Path Strewed With Pitfalls
Despite the growing optimism in the report, Citi analysts are still non-committal and revealed potential issues that could hinder adoption. “The arrival of institutional investors has created confidence in the cryptocurrency, but there are lingering issues that could limit widespread adoption,” the report said.
Regulatory difficulties were highlighted as a significant problem that could hinder the adoption of bitcoin globally. There are already several governments in the world that have taken significant steps towards setting strict regulations for bitcoins. This could cause fear among the local populace and hinder localized adoption of cryptocurrency.
Citi analysts also pointed out that the bitcoin network lacks scalability and is often prone to congestion. However, the report considers the development of solutions like Lightning Network that is capable of increasing the capabilities of the bitcoin network. Although other risks remain, these can be quickly swept aside as bitcoin adoption progresses with time. The report concludes by stating that bitcoin is at the tipping point of its existence.
Citi notes that the development of the leading currency will have far-reaching implications for the global economy and the future of finance. This document by Citi echoes the bullish sentiment held by many traders and institutions about bitcoin.