The world's leading cryptocurrency is also poised to become its leading means of transaction for international trade, according to a notable group of analysts. A team from Citigroup's (NYSE:C) Global Perspectives & Solutions (GPS) research unit made that eye-opening analysis of Bitcoin (CRYPTO:BTC) in a 108-page report titled "Bitcoin: At the Tipping Point" published on Monday.
"It is immune from both fiscal and monetary policy, avoids the need for cross-border foreign exchange (FX) transactions, enables near instantaneous payments, and eliminates concerns about defaults or cancellations as the coins must be in the payer's wallet before the transaction is initiated," the Citibank prognosticators wrote of the white-hot cryptocurrency in their report.
According to GPS, another powerful factor that should continue to add value to Bitcoin is that it is an effective store of value. This so-called "digital gold" perception should only increase, and add to its attraction as a cross-border means of transaction.
Other spurs to Bitcoin's advancement to the top ranks of trade currencies include increased take-up by businesses. GPS found that Bitcoin's penetration into the small and mid-sized businesses that drive the U.S. economy forward has been significant. The unit's research indicates that 36% of such enterprises accepted it in 2020.
Monetary officialdom is also warming to cryptocurrencies generally. The report pointed out that a recent survey of 60 central banks revealed that 86% were working in one way or another with them.
Citgroup's analysis wasn't completely bullish on Bitcoin. Among other cautions, the prognosticators warned that if institutional enthusiasm were to wane sufficiently, this "would remove a key source of support to Bitcoin and potentially the broader ecosystem, thus pushing it back to its more speculative roots."