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Crypto markets benefited from a positive backdrop after Donald Trump’s election victory in the United States, the report said.
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Citi said the appointment of Paul Atkins as chairman of the SEC provided the final impetus that took bitcoin to a record high of more than $100,000.
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Other digital assets likely have more to gain from a more tolerant regulatory environment, the bank said.
Bitcoin (BTC) reached an all-time high above $100,000 earlier this week as a number of tailwinds fueled a post-election US rally in the world’s largest cryptocurrency, Citi (C) said in a research report Thursday.
“The appointment of digital asset favorite Paul Atkins to chair the SEC provided the final push,” which saw Bitcoin break through $100,000 to record highs, wrote analysts led by Alex Saunders.
U cryptocurrency it was trading around $98,500 at the time of publication.
Bitcoin continues to be bolstered by exchange-traded fund (ETF) flows and other purchases as adoption grows, the bank said.
The macro environment is also constructive for digital assets. Loose financial conditions and resilient growth are positive for crypto tokens, Citi said.
“Other digital assets likely have more to gain from a more permissive regulatory environment,” the authors wrote, noting that bitcoin’s dominance has fallen.
Citi said it hasn’t seen a noticeable uptick in chain activity.
In the longer term, the bank said that the utility or value of a network will be linked to its use, macro correlations and production costs.
A new, more benign regulatory system could unlock more and broader use cases for blockchain assets, the report added.
More permissive crypto policies should expand the asset class, Citi said, but Bitcoinwhich has already been classified as a commodity, and has both a spot ETF and a futures contract, has less to earn than other tokens.
