Global bank Citi has published a report for clients on Bitcoin’s potential as an asset class, and pointed out in it the cryptocurrency has potential for a “massive transformation,” and could become the “currency of choice” for international trade.
In a 107-page report from Citi’s “GPS” research series, first spotted by TheStreet, researchers at the bank said BTC could become the “currency of choice” for international trade thanks to its global reach and political neutrality, while also adding there are hurdles in its path, including the environmental impact of bitcoin mining.
The global head of City GPS, Kathleen Boyle, wrote: “Weighing these potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point and we could be at the start of [a] massive transformation of cryptocurrency into the mainstream.”
The report comes at a time in which some of the biggest names in finance have been eyeing cryptocurrencies. JPMorgan, as CryptoGlobe reported, has recently argued a multi-asset portfolio may consider allocating 1% of its funds into bitcoin.
British asset manager Ruffer, which manages $28.3 billion of investor funds and has allocated a percentage of its portfolio into the flagship cryptocurrency, recently argued it’s early on the bitcoin bandwagon, saying: “We think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialization of bitcoin.”
Earlier this year the company argued that bitcoin’s reputation is a “risk premium” that could pay off over time. The firm has bitcoin exposure via its Ruffer Multi Strategies Fund and via two proxy equities that invested in the flagship cryptocurrency: MicroStrategy and Galaxy Digital.
With bitcoin’s price rise the company took a $650 million profit off of its BTC investment but has maintained exposure to the flagship cryptocurrency. At the time, the firm said it still had “around $700 million left in.”
Cathie Woods, the head of the world’s largest actively managed exchange-traded fund, Ark Invest, has said she conservatively estimated BTC’s potential, as she says its total value could in the future be “in the trillions” of dollars. This, if corporations keep on using BTC to hedge against inflation.