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Citibank considering entry into cryptocurrencies

Citibank, the bank of the American company Citigroup, is studying the possibility of entering the world of cryptocurrencies, according to its global director of foreign trade, Itay Tuchman.

Citibank considering entry into cryptocurrencies. According to an interview published by the Financial Times on Thursday, May 6, 2021, the possibility arises from the bank’s “customer interest.” In this sense, Tuchman explained that they are considering and analyzing “various alternatives” to offer their users, including trading, financing, and custody services for crypto assets

However, the manager also assured Citibank is in no hurry to make an entry decision: “I do not have FOMO (fear of missing out) because I believe that cryptocurrencies are here to stay.” He added that “there is room” for various banking entities to enter the market; “This is not a space race,” he argued.

Citibank would thus join the list of U.S. banks that offer their clients the alternative of accessing crypto assets. Morgan Stanley was the first to offer Bitcoin investment funds (BTC) to its clients in the United States. Later, in April, the US Bank. Others have done the same, such as Goldman Sachs and BNY Mellon.


Citibank back and forth with Bitcoin

Beyond this announcement, Citibank has had a see-saw relationship with Bitcoin and cryptocurrencies in recent years. The most recent precedent is in March 2021, when the entity published a Bitcoin document, “At the Tipping Point.” 

In that report, Citibank analysts explain the pros and cons of Bitcoin’s growing popularity and adoption, primarily at the institutional level. In conclusion, Citi states that this cryptocurrency could become a global payment method in the future, even though there are still certain obstacles to address. 

Citibank’s foray into this digital world was planned in 2019 when it thought of launching its cryptocurrency to facilitate payment transactions. As reported by this outlet, the project was ruled out for not being compelling enough.


Citibank manager believes Bitcoin will pass $ 300,000 in 2021

Citibank’s Managing Director Tom Fitzpatrick calls Bitcoin “the gold of the 21st century.” Through a report aimed at the bank’s institutional clients, Fitzpatrick compared the first significant bull run on bitcoin between 2010 and 2011, with the rise in the price of gold in the 1970s. 

In the report, leaked on Twitter this Friday, November 13, the executive valued the bitcoin (BTC) shortage and said that we are in a digital age. “Gold is a 20th-century asset,” he argued. 

Likewise, the analyst considered the ability to transfer value worldwide quickly and the “opaque ownership” of those who own bitcoins. Bitcoin’s degree of privacy and anonymity is part of its value in the eyes of Fitzpatrick.

In addition to its valuation of Bitcoin as an asset, Citibank’s analysis contains Bitcoin price predictions for the following year. After a technical analysis, which is worthwhile in addition to previous bullish periods, the report states that it is probable to reach a new record for the price of bitcoin in 2021 (ATH, All-Time High). 

According to estimates by Fitzpatrick, an executive with more than 30 years of career in the banking institution, by December of next year, the price of bitcoin would exceed $318,000. 

Among its bullish considerations, it stands out that each positive cycle for the pioneer cryptocurrency exceeds the previous one in time—first, two years between 2011 and 2013, then almost three years, from 2015 to 2017. “Of course, consequently, it can be argued that there will be higher levels,” the report says.


The institutional investment fever in bitcoin

This stance from the Citibank representative seems to coincide with the new wave of institutional investment in Bitcoin in recent months. Cases like MicroStrategy, Square, or Grayscale’s BTC fund’s latest investment records show renewed interest in cryptocurrency.

There are those in the Bitcoin environment who question the Citibank report. Some people in the bank were concerned about Bitcoin in the past. Some mention that Bitcoin is precisely to end the supremacy of banks. “That the big banks get bullish on Bitcoin should worry you. They have ulterior motives,” the @CryptoWhale account wrote via Twitter.

However, the primary reaction to this report has been positive. Comments on Twitter focus on Fitzpatrick’s price prediction and add this “21st-century gold” stance to the recent institutional attitude. 

The truth is that while bitcoin continues to gain traction among companies and governments worldwide. Already an elected senator in the United States has assured that she hopes to position the national agenda. More and more analysts and personalities see Bitcoin as a safe asset to protect value. 

However, until a few years ago, the position of this bank was different. In 2018, Citibank’s headquarters in India prohibited its customers from acquiring cryptocurrencies with credit cards, which had previously been restricted in the United States.



Bottom Line

  • The bank is studying the possibility of providing trading and custody services for crypto assets.
  • Cryptocurrencies are here to stay,” said its director of foreign trade.
  • For Tom Fitzpatrick, bitcoin is the “gold of the 21st century“.
  • According to Fitzpatrick, bitcoin will have new highs with a longer bullish period.

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