Major US bank Citi released a note today announcing a surprising revelation regarding its feelings on cryptocurrencies. Not only did the bank say cryptocurrency is “at the tipping point of mainstream acceptance” but also that Bitcoin could one day “become the currency of choice for international trade”.
The news suggests a shifting attitude from traditional financial institutions, most of which have disregarded cryptocurrencies in the past. However, with major players like Tesla, Paypal, and Square making large investments into Bitcoin, it now seems traditional banks are finally taking it seriously.
After a week-long slump that saw Bitcoin lose almost 25% of its value, it appears to be recovering and is up 10% today. Ethereum (ETH), which suffered larger losses after getting knocked back at $2,000 has made even better gains of 15% today.
The note, from Citi’s global perspectives and solutions team, was not all positive, however. The analysts clarified that “there are a host of risks and obstacles that stand in the way of Bitcoin’s progress” and its “future is thus still uncertain.”
The news comes hot on the heels of similar news from fellow major bank JPMorgan. Speaking to CNBC in early February, JPMorgan co-president Daniel Pinto said the bank “will have to be involved” if other asset managers and investors start using crypto. However, JPMorgan analysts followed up these comments later in the month saying Bitcoin’s price appears to be “unsustainable” and doesn’t make much sense.
Up 460% in the past 12 months, many investors fear Bitcoin is in another bubble and will likely burst like it did in late 2017. However, with a large degree of institutional investment and many people looking to Bitcoin as a hedge against inflation, this year could be different.