Bitcoin is at a ''tipping point,'' Citi says

LONDON (Reuters) - Bitcoin is at a "tipping point" and could either become the preferred currency for international trade or face a "speculative implosion," Citi analysts said.

With the recent embrace by the likes of Tesla Inc and Mastercard Inc, bitcoin could be at the start of a massive transformation in going mainstream, Citi said in a report.

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The growing involvement from institutional investors in recent years contrasts with heavy retail-focus for most of the past decade, it added.

If businesses and individuals gain access via digital wallets to planned central bank digital cash and so-called stablecoins, the popular digital currency`s global reach, traceability and potential for quick payments could see its use for commerce widen dramatically, Citi said.

The surge in interest drove bitcoin to a record high of $58,354 and a $1 trillion market capitalisation. It, however, pulled back more than $11,000 from those levels in the last week on questions over the sustainability of such high prices.

"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."

Bitcoin was trading 3.9% higher at $46,980 on Monday, up nearly 63% so far this year.

(Reporting by Thyagaraju Adinarayan; editing by Tom Wilson)

The story has been taken from a news agency