Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Bitcoin rose nearly 7% on Monday as risk assets rallied after last week’s bond rout cooled, with Citi saying the most popular cryptocurrency was at a “tipping point” and could become the preferred currency for international trade.

With the recent embrace of the likes of Tesla Inc and Mastercard Inc, bitcoin could be at the start of a “massive transformation” into the mainstream, the investment bank said.

Goldman Sachs, meanwhile, has restarted its cryptocurrency trading desk and will begin dealing bitcoin futures and non-deliverable forwards for clients next week, a person familiar with the matter told Reuters.

Story continues below advertisement

“Those drawing parallels to the bursting of the crypto bubble in 2017 may not be accounting for the technology’s advancement since then,” said Paolo Ardoino, chief technology officer at cryptocurrency exchange Bitfinex.

Bitcoin, which hit a record high of $58,354 in February, could in the future become the preferred currency for international trade or face a “speculative implosion,” Citi said.

“There are a host of risks and obstacles that stand in the way of bitcoin progress,” Citi’s analysts wrote. “But weighing these potential hurdles against the opportunities leads to the conclusion that bitcoin is at a tipping point.”

The world’s largest cryptocurrency was up 6.8% at $48,330 in early afternoon trading. Smaller rival ether rallied 6.8% to $1,517.

Bitcoin’s 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 said.

If businesses and individuals gain access via digital wallets to planned central bank digital cash and so-called stablecoins, bitcoin’s global reach, traceability and potential for quick payments would see it “optimally positioned” to become the preferred currency for international trade, Citi added.

Bitcoin, designed as a payment tool, is little used for commerce in major economies, hampered by high volatility and relatively costly transactions. Yet it has gained traction over in some emerging markets, such as Nigeria, over the past year.

Story continues below advertisement

Such a dramatic transformation to the de facto currency of world trade – a status currently held by the dollar – would depend on changes to bitcoin’s market to allow wider institutional participation and closer oversight by financial regulators, Citi said.

Still, shifts in the macroeconomic environment could also make the demand for bitcoin less pressing, it added.

The recent surge in interest, sparked by a narrative that bitcoin can act as a hedge against inflation, has driven it to a record high and a $1 trillion market capitalization.

But it has pulled back more than $11,000 from those levels in the past week on questions over the sustainability of such high prices.

New York Attorney General Letitia James on Monday warned investors to take “extreme caution when investing in virtual currencies”.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies