After dropping 6.39 per cent to $43,165.78 on Sunday, cryptocurrency bitcoin gained almost six per cent on Monday, March 1, as Citi said that the most popular cryptocurrency was at a ‘tipping point’ and could become the preferred currency for international trade. On Sunday, February 28, bitcoin lost $2,944.20 from its previous close. Citi stated that with the recent announcements of Tesla Inc and Mastercard’s investments in the digital currency, bitcoin could be at the start of a massive transformation in the mainstream. (Also Read: Bitcoin Plummets 17% To $45,000 Amid Concerns Over High Valuation )
The investment bank added that bitcoin, which has risen to $47,000 from $4,700 last March, could become the preferred currency in the near future for international trade or face a speculative implosion. Bitcoin was last up 5.84 per cent to $47,925.5. Tracking similar sentiment, smaller rival ether rallied 7.5 per cent to $1,525.
The bank said that bitcoin’s recent performance has come with the growing involvement of institutional investors in recent years, contrasting with its heavy retail investor focus for most of the past decade. If the businesses or individuals gain access through digital wallets to planned central bank digital cash and so-called stablecoins, bitcoin’s global reach, traceability, and potential for quick payments would see it ‘optimally positioned’ to become the preferred currency for international trade, according to Citi.
Bitcoin achieved an all-time record high of $58,354 in February, and its market cap also reached $1 trillion, after various corporate majors including BNY Mellon, MicroStrategy, Tesla, Mastercard, showed enthusiasm towards the digital currency. Ever since US online payment firm PayPal allowed the use of bitcoin on its network, investors have been attracted towards its inflation hedging qualities and potential for quick gains.
However, bitcoin pulled back more than $11,000 from those levels in the last week on questions over the sustainability of such high prices.