Citi Says Bitcoin at Tipping Point for Mainstream Adoption, Goldman Sachs Restarts Cryptocurrency Trading Desk

The U.S. House of Representatives passed Biden's $1.9 trillion stimulus plan, the soaring U.S. 10-year Treasury yield retreated from highs, Johnson & Johnson's COVID-19 vaccine was approved and began shipping, and with multiple positive catalysts, U.S. stocks rallied on Monday. The S&P 500 posted its biggest gain in nearly 9 months, the Nasdaq closed up about 400 points, gaining over 3%, and investors' risk appetite strengthened.

As U.S. stocks rose, Bitcoin gained after three consecutive days of declines. OKX market data shows Bitcoin closed up on March 1, with a daily gain of over 13%. On the same day, U.S. banking giant Citibank released a report titled "Bitcoin at the Tipping Point."

In this 108-page report, Citi notes that while Bitcoin's future remains uncertain, with successive endorsements from companies like Tesla, PayPal, and Mastercard, coupled with central banks accelerating exploration of their own cryptocurrencies, Bitcoin is likely at a tipping point for a massive transformation into mainstream adoption.

"The most significant difference between this bull market and previous ones is the growing interest from institutional investors in Bitcoin. More and more institutional investors believe Bitcoin can hedge against inflation, diversify investment portfolios, and serve as a safe haven that traditional government bonds cannot provide," Citi wrote in the report.

Indeed, data from bitcointreasuries.org shows that 42 companies currently hold over 1.35 million Bitcoin, accounting for 6.43% of Bitcoin's total supply of 21 million, with a total value exceeding $65 billion. The largest holder is Grayscale, which owns 649,100 Bitcoin. The list also includes 22 public companies holding Bitcoin, with MicroStrategy and Tesla ranking first and second with 90,800 and 48,000 Bitcoin respectively.

Citi cited another example proving increased institutional activity in Bitcoin. From October 2020 to January 2021, open interest in Bitcoin futures on the CME surged over 250%, a metric traditionally regarded by the industry as a benchmark for institutional activity.

A Coin Metrics chart cited in Citi's report shows that the number of addresses holding over 1,000 Bitcoin continues to increase as Bitcoin's price rises, indicating more high-net-worth individuals are investing and hoarding Bitcoin.

Citi's report points out that perceptions of Bitcoin's importance are constantly evolving, and more people believe Bitcoin is becoming mainstream. Bitcoin's characteristics—decentralization, borderlessness, rapid fund transfers, secure payment channels, and traceability—combined with its global influence and neutrality, may position Bitcoin as the "preferred currency" for international trade.

However, Citi also highlighted obstacles Bitcoin must overcome before becoming a mainstream payment tool, such as capital efficiency, insurance, custody, security, and Environmental, Social, and Governance (ESG) issues related to Bitcoin mining. Any misstep could lead to a "speculative implosion"—the origin of the "tipping point" reference.

While security incidents in cryptocurrency occur periodically, cryptocurrency performs better than traditional payments. Citi cited Chainalysis and Federal Reserve data showing that criminal activity accounted for 0.34% of total cryptocurrency trading volume in 2020, down from 2.1% in 2019, demonstrating that the perception of Bitcoin as a primary channel for illegal activity is a clear misconception.

According to a March 2 Reuters report, sources said Goldman Sachs has restarted its cryptocurrency trading desk and plans to begin offering clients Bitcoin futures and non-deliverable forwards (NDF) trading services next week. The team is part of Goldman's Global Markets division, established to address rapidly growing digital asset sector activity. Sources said Goldman is also exploring the possibility of a Bitcoin ETF and has issued a request for information to explore digital asset custody.

Institutions including CME, Bakkt, and Fidelity already provide products and services for cryptocurrency. Jurrien Timmer, Global Macro Director at Fidelity Investments, believes that given the current economic backdrop, investors may want to start considering adding Bitcoin to their investment portfolios.

Timmer stated that Bitcoin can be viewed as "digital gold" due to its anti-inflationary properties. Timmer specifically emphasized that Bitcoin's limited supply is its unique attribute. "We all know Bitcoin's growth is flattening, but gold has a steady supply with no signs of slowing," Timmer said.

Citi's report expressed similar views, noting that as Bitcoin gains favor, trends favoring Bitcoin over gold are becoming increasingly difficult to ignore.

Undoubtedly, Bitcoin is transforming from a decade of retail-driven growth to something currently attractive to institutional investors. When institutional investors seek returns and alternative assets, they are also drawn to Bitcoin's anti-inflationary properties. Additionally, exchanges, trading, data, and custody services are gradually improving to meet institutional investor requirements.

Disclaimer: Digital asset trading involves significant risk. This material should not serve as the basis for investment decisions, nor should it be construed as advice to engage in investment trading. Please ensure you fully understand the risks involved and invest cautiously. OKX Academy provides information for reference only and does not constitute any investment advice. Users' investment activities are unrelated to this site.

Disclaimer

This article may contain product-related content not applicable to your region. This article is intended solely to provide general information and assumes no responsibility for any factual errors or omissions herein. This article represents the author's personal views only and does not represent OKX's views. This article is not intended to provide any advice, including but not limited to: (i) investment advice or investment recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets (including stablecoins) involves high risk, may fluctuate significantly, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For questions about your specific situation, please consult your legal/tax/investment professional. Information appearing in this article (including market data and statistics, if any) is for general reference only. While we have taken all reasonable precautions in preparing these data and charts, we assume no responsibility for any factual errors or omissions expressed herein. © 2025 OKX. This article may be reproduced or distributed in its entirety, or excerpts of 100 words or less from this article may be used, provided such use is non-commercial. Any reproduction or distribution of the entire article must also prominently state: "This article © 2025 OKX, used with permission." Permitted excerpts must cite the article title and include attribution, for example "Article Title, [Author Name (if applicable)], © 2025 OKX". Some content may be generated or assisted by artificial intelligence (AI) tools. Derivative works or other uses of this article are not permitted.

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