{"id":108271,"date":"2021-03-01T13:37:14","date_gmt":"2021-03-01T13:37:14","guid":{"rendered":"https:\/\/fin2me.com\/?p=108271"},"modified":"2021-03-01T13:37:14","modified_gmt":"2021-03-01T13:37:14","slug":"bitcoin-rises-6-as-risk-assets-rally-citi-says-at-a-tipping-point","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/bitcoin-rises-6-as-risk-assets-rally-citi-says-at-a-tipping-point\/","title":{"rendered":"Bitcoin rises 6% as risk assets rally; Citi says at a "tipping point""},"content":{"rendered":"
LONDON (Reuters) – Bitcoin rose nearly 6% on Monday as risk assets rallied after last week\u2019s bond rout cooled, and Citi said the most popular cryptocurrency was at a \u201ctipping point\u201d and could become the preferred currency for international trade.<\/p> With the recent embrace of the likes of Tesla Inc and Mastercard Inc, Bitcoin could be at the start of a \u201cmassive transformation\u201d into the mainstream, Citi added.<\/p>\n Bitcoin, which has risen to $47,000 from $4,700 last March, could in the future become the preferred currency for international trade or face a \u201cspeculative implosion,\u201d the investment bank said.<\/p>\n It was up 5.7% at $47,834 as of 1127 GMT on the Bitstamp exchange. Smaller rival ether rallied 7.5% to $1,525.<\/p>\n Bitcoin\u2019s 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, Citi added.<\/p>\n If businesses and individuals gain access via digital wallets to planned central bank digital cash and so-called stablecoins, bitcoin\u2019s global reach, traceability and potential for quick payments would see it \u201coptimally positioned\u201d to become the preferred currency for international trade, Citi said.<\/p>\n Bitcoin, designed as a payment tool, is little used for commerce in major economies, hampered by high volatility and relatively costly transactions. Still, it has over the past year gained traction in some emerging markets such as Nigeria.<\/p>\n Such a dramatic transformation for bitcoin to the de facto currency of world trade – a status currently held by the dollar – would depend on changes to its market to allow wider institutional participation and closer oversight by financial regulators, Citi said.<\/p>\n Still, shifts in the macro-economic environment may also make the demand for bitcoin less pressing, it added.<\/p>\n The recent surge in interest in bitcoin, sparked by a narrative that it can act as a hedge against inflation, has driven the cryptocurrency to a record high of $58,354 and a $1 trillion market capitalisation.<\/p>\n But it has pulled back more than $11,000 from those levels in the last week on questions over the sustainability of such high prices.<\/p>\n \u201cThere are a host of risks and obstacles that stand in the way of Bitcoin progress,\u201d Citi\u2019s analysts wrote. \u201cBut weighing these potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point.\u201d<\/p>\n Graphic: Bitcoin’s surge from March lows –<\/p>\n