Move Over, US Dollar. Here comes Bitcoin as “Currency of Choice”

05 Mar, 2021
Move Over, US Dollar. Here comes Bitcoin as “Currency of Choice”

“Wall Street firms that haven’t focused on bitcoin and wrote it off are absolutely losing their s… right now according to the insiders I’m talking to,” tweeted @fintech frank on Thursday.

That about sums up the biggest Bitcoin news this week as analysts at yet another major financial institution declared that the world’s first digital currency could soon become the international “Currency of Choice.”

Wow.  Where did that bold statement come from?

Actually, it came from a group of seasoned analysts at Citi, a global financial giant. The analysts, who call BTC the “de facto North Star” of the digital currency world, summarized the state of BTC as this:

“Where could Bitcoin be in another seven or so years? The report notes the advantage of Bitcoin in global payments, including its decentralized design, lack of foreign exchange exposure, fast (and potentially cheaper) money movements, secure payment channels, and traceability. These attributes combined with Bitcoin’s global reach and neutrality could spur it to become the currency of choice for international trade.”

The 108-page report comes on the heels of other major financial groups making moves to acknowledge the ever-growing interest in crypto.  Just a few weeks ago, BNY Mellon, the oldest bank in the US, jumped into the digital currency market by announced the formation of a Digital Assets Unit.  Mastercard, another financial giant, announced in February that it would begin processing select cryptocurrencies at some point this year. And in Europe, 177-year-old bank Bordier & Cie SCmA clients “can now securely buy, hold and trade cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash and Tezos, and gain diversified exposure via Sygnum’s suite of digital asset management products.”

With this growing buzz in the mainstream world as well as heightened institutional investor interest in BTC, it's no surprise that the coin is up more than 60% this year. Speculation abounds by analysts as to just how far BTC can go in 2021 in terms of value.  Will it settle at $50K US?  Will it reach $150K as some analysts project?  While some traders may focus strictly on the value of their assets, others are looking at the bigger picture that Citi suggests.

If not now, when can the crypto world expect mass adoption of crypto in the fiat world?

The Citi analysts offered this witty scenario as an answer:

“According to Visual Capitalist, it took the telephone 50 years to reach 50 million customers, 22 years for television, seven years for the Internet and just 19 days for Pokémon Go. So, it's not a surprise the uptake of Bitcoin in the past almost 7 years has been nothing but extraordinary.”

Of course, there are many traders who anxiously track the BTC price each day, watching for signs that 2021 could be another 2017 “bubble” when the bottom fell out on the BTC price. But according to one theory, the coin’s price is really cyclical.

“Indeed, over the coming year, it appears likely that one of the biggest critiques against Bitcoin – that its price is irrational and speculative – will be proven inaccurate by data that better describes it as both cyclical and predictable,” writes Peter Rizzo for Forbes.com. Rizzo suggests that the three BTC “bubbles,” which occurred exactly four years apart, are not bubbles at all, but are cyclic opportunities to reboot the market that are baked into BTCs coding.

However you choose to look at the surging interest in BTC and other digital coins (a rising tide lifts all boats), now's the time to savor the momentum of this digital currency moment. Except if you're a fan of the U.S. Dollar, which is now clearly in the sightline.

The Citi report summed up the current BTC landscape this way:

“ Large institutional investors and organizations are choosing to participate in and support Bitcoin. Regulators are beginning to lay the groundwork for the asset to potentially enter the mainstream. Governments themselves are being pressured and many are re-considering their own currency offerings. The vision of Bitcoin as a force that will transform the world may seem self-evident in just a few more years. The fact this progression has occurred in just over a decade makes Bitcoin remarkable regardless of its future.”

Joyce Pavia Hanson

Contributor

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