As we slowly move along from 2020 to 2021, we continue to look into the future and wonder what it holds for the world of blockchain and cryptocurrencies. So, we thought we'd take a peek into the crypto crystal ball and see what 2021 may look like for cryptocurrencies.
Adoption and Recognition of Crypto
The first small glimpse we can take is the increased popularity of cryptocurrency. In 2021, crypto will continue to be recognized as one of the most important global fintech trends. After the pandemic, digital assets and tokenization are likely to become more integrated into our day-to-day monetary systems, even to the point of forming the basis for adoption of central bank digital currencies and the increased use of crypto in decentralized finance (DeFi).
Bullish Growth of Ethereum
The second prediction is that Ethereum will continue to grow at a rapid rate. From a macro perspective, Ether remains in a bullish state after a 25% correction from year-to-date highs. Crypto as a whole has shown bullish growth, and Ethereum's 2.0 upgrade is expected to begin in the near future as they roll out phase zero; these two factors in tandem are cause for excitement among the Ethereum community. There are a couple of wrinkles, though. Ethereum is facing new competition from Polkadot. Ether has also faced some challenges over recent months as the cost of transactions has increased. Be that as it may, industry experts all forecast Ethereum to thrive in 2021.
Bitcoin and Ethereum are just two examples of cryptocurrencies that are available.
Regulation Favors Crypto
One of the primary struggles crypto has had to contend with is regulation. However, looking back at 2020, some new laws have actually opened the door for more wide-spread acceptance for crypto, and it's expected that 2021 will continue this acceptance in the regulatory sphere. Meanwhile, the uptick in Bitcoin and other crypto assets prices won't necessarily give lawmakers extra urgency to regulate. The gradual acceptance is likely to continue as governments and regulators are being enlightened to the potential boons crypto has to play in the world of finance.
Some examples of this: Australia is moving toward blockchain solutions for regulation standards, Canada is actively working on developing digital currency, while the US, the UK, and the EU are also exploring the potential adaptation of digital currency. Additionally, China will soon allow citizens to inherit cryptocurrency and South Korea will soon be treating crypto exactly the same as paper money.
While purists may say regulation is inherently restrictive, giving legal endorsements to crypto is almost certain to attract wider interest in digital money.
Bitcoin's Growth Continues, potentially Breaks Record
With all the optimism and Bitcoin's resurgence in the second half of 2020, it's likely to come close to its record high of $19,892, and may even surpass it during 2021, finally eclipsing the elusive $20,000 mark. The excitement around Bitcoin may not be what it was back in 2017, but the coronavirus pandemic has illustrated the very real value and applications Bitcoin and other cryptocurrencies may have to play in the financial sector.
So, there are four predictions for cryptocurrencies in 2021. We will expect to see continued growth and, just as importantly, unprecedented acceptance of crypto.