Citibank Embraces Bitcoin
Summary
Citibank published a report about Bitcoin’s mainstream adoption
Bitcoin is becoming less risky as an investment everyday
Background
Hoodie Gang,
On March 1st, 2021, Citi, the 13th largest bank in the world, released a report titled “Bitcoin: At the Tipping Point”.
The report shows the progression of how Citi views Bitcoin. Bitcoin is evolving over time from being a speculative means of currency exchange to something much more than that. Big banks are taking Bitcoin more serious than ever.
The report describes how Citi viewed Bitcoin back in 2014:
In May 2014, when we published the report, Bitcoin was just five years old with a market value around $6.2 billion. We wrote that Bitcoin was familiar and welcome to younger generations and although older investors may have heard the word, they were generally less familiar with it and more skeptical. We recognized there was very little Bitcoin activity among institutional investors in organized financial markets as it was considered 'far too risky and volatile'. In the end, we still assessed Bitcoin as a 'wannabe asset' and a 'wannabe means of transaction' and lamented that although you could have a lot of Bitcoin, but there wasn't much to do with it.
Citi describes the shift in the way the institution views Bitcoin in current day by writing:
In the report that follows, the authors note the biggest change with Bitcoin is the shift from it being primarily a retail-focused endeavor to something that looks attractive for institutional investors. In a search for yield and alternative assets, investors are drawn to Bitcoin's inflation hedging properties and it is recognized as a source of 'digital gold' due to its finite supply.
Citibank now believes Bitcoin is at the tipping point to becoming main stream.
Quick Story
I recently met with a business banker at my local banks branch. I was looking to set up a new bank account for my company, Hoodie Crypto LLC.
While setting up the business account, the banker and I started small talking. He asked about my new business. I explained how Hoodie Crypto provides education about Bitcoin and other Crypto assets. The banker chuckled and said “I bought Bitcoin back in 2012 when I was in college. I sold it all and am not invested in Bitcoin at all. Maybe I should look back into it.”
My conversation with this business banker happened last week. I wonder how he feels about Citibanks new report.
Why is this Important?
The report put out by Citibank is important for many reasons. I believe the biggest reason the report is important is because it derisks Bitcoin investments for many different groups of people.
Let’s start with how this news minimizes the risk of investing in Bitcoin for you. The 13th largest bank in the world put out a report claiming that Bitcoin is now at the tipping point to reaching main stream adoption. Citi uses millions of dollars to generate these reports. If Citibank is investing millions of dollars to study Bitcoin and reached a conclusion that this stuff is about to hit mainstream, then maybe investing into buying Bitcoin is not as risky as you originally thought.
Next, let’s talk about how this report influences big money. The banks are the big money. They will not pay attention to something until it is worth at least a few billion dollars. Think about all the other banks reading Citi’s report on Bitcoin. If they have not already been looking into adding crypto assets to their banking platforms, I bet they are about to start.
Finally, small and large businesses will be influenced by this report. Let’s say you own a small business. If your bank begins offering ways to invest in Bitcoin, you would consider allocating some of your business funds into Bitcoin. The bank offers it, so it must be something worth looking into. Right?
Change leads to opportunity. Our old money system is changing to a new money system right in front of our eyes. It is only a matter of time before Bitcoin reaches mainstream adoption.
Happy Monday,
-Pod
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Eric Podwojski
Founder, Bitcoin EDU
Twitter: @epodrulz