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Citi says that another cryptocurrency might be able to usurp Bitcoin from its current high position citing the fact that altcoins have witnessed their market cap grow by almost 4 times in 2020.
Citi Bank has released a new report that indicates that Bitcoin is at a “tipping point” of its evolution due to the increased investments in the asset by leading institutions and the ongoing regulatory works being put in place by the authorities. According to the report, the digital could evolve to become the currency that would be used to facilitate future international transactions or face a “speculative implosion.” Also in the report, the bank labeled BTC as a “North Star” of innovation.
Citi’s report went on to state that the virtual currency has become totally different from what it was in 2017 when it was being majorly traded by small-scale retailers. Today, the asset has broken into the mainstream as more institutions and businesses now accept BTC as a payment method and as viable means of a store of value. This marked difference shows that the level of trust in the coin is different from what it used to be in years before.
One notable fact the bank was able to highlight was that the digital coin now has a global outreach and its borderless design would make it a very preferable currency to be used in future international transactions. Already, Iran has identified the asset as a means of circumventing the stringent sanctions being imposed on it by the United States.
The perception of the coin has also evolved with time. While in its early stage, the perception of the cryptocurrency was based on its technology, which has evolved over time and, today, the focus is now on its scarcity and its ability to resist censorship. The bank has now predicted that this perception could change to how it could be a facilitator of global trades in the future.
Citi: Success of Bitcoin Depends on Certain Factors
The leading international investment bank also highlighted some challenges Bitcoin could face on its part to becoming a global currency that would be used for international transactions.
Citi bank says that another cryptocurrency might be able to usurp Bitcoin from its current high position citing the fact that altcoins have witnessed their market cap grow by almost 4 times in 2020 and the market dominance of the “digital gold” dropped from 69% to 62% in 2020. This means that altcoins are also experiencing massive growths and they are also beginning to eat into the dominance of BTC
Another factor that could hinder the progress of Bitcoin is if authorities around the world are able to get a grasp on the spiraling threat of inflation. The bank highlights that this could make the asset less attractive to investors who might invest in it as a store of value.