Where Is the Cryptocurrency Industry Headed in 2021?

Bitcoin, as of December 2020, has experienced a steadily rise to reach new all-time highs, breaking through $ 20,000 per BTC, but it was not always sol steady .

To get a sense of just how troubling the market had been, merely attend to 2018 : Heading into 2018, Bitcoin traded for conclusion to $ 13,500 after reaching an all-time high of $ 19,783.06 in December of 2017. It subsequently dropped a broken as $ 3,400, a loss of about three-quarters of its value—and early digital currencies were n’t faring much better at the time. Ethereum ( ETH ), for case, fell from an early-year high of $ 1,300 to precisely $ 91 by December 2018 before rallying back to over $ 450 by the conclusion of 2020.

Cryptocurrencies like Bitcoin and Ethereum have indeed proven bouncy. investor interest, both retail and institutional, in digital currencies has risen dramatically in late months. many early investors who were eager to make gains from the “ cryptocurrency madden ” have since moved on to other ventures, leaving a smaller group of stalwart HODL -ers behind. But there are still reasons to believe that the cryptocurrency industry has some fight in it left .

Investors are again asking : how high digital coins could fly ? And Bitcoin indeed has risen back to all-time highs as of December 2020, reaching over $ 23,625 and Ethereum to closely $ 700. now, looking into the end of 2020 into 2021, the better doubt might be how this space will adapt in ordain to survive .

Key Takeaways

  • Bitcoin and other cryptocurrencies have emerged as a new asset class that has seen extraordinary returns over the past decade.
  • After reaching nearly $20,000 in early 2018, Bitcoin fell to just around $3,000 as the rest of the crypto market also fell.
  • 2019-2020 have proven to be years of recovery, with Bitcoin strengthening to above $15,000, but will the bull market last?
  • Several new developments such as increased institutional interest, pending ETF approval, and the popularity of stablecoins suggest a continued positive trend.

institutional Investors Get in the Game

Although trade wind figures for person investors are down in many cases, institutions are climbing on board in a significant way for the first time. institutional investors allow for significantly larger deal volumes than most individual investors, meaning that even if fewer trade partners are transacting in the digital currency quad, the industry can calm sustain itself .

There are several potential developments projected to take place in 2020 and 2021 that could significantly impact institutional engagement in the digital currentness market. If crypto is floated on the Nasdaq or a like exchange, for exemplar, it will immediately get a promote in reputation—and probable, measure .

The Elusive Bitcoin ETF

For years, crypto enthusiasts have pined for a digital currentness ETF available to mainstream investors in the U.S. The U.S. Securities and Exchange Commission ( SEC ) has repeatedly rejected or delayed Bitcoin ETF applications to be decided upon at a future date. One of the most talked-about funds, by supplier VanEck, has seen its final approval decision pushed back again and again.

Some analysts believe that the approval of a mainstream Bitcoin ETF could provide a significant jolt to the digital currentness world, opening up the diligence to investors tidal bore to participate without some of the risks associated with buying and betray tokens immediately. As of now, though, the future of VanEck ‘s fund remains to be seen .

Stablecoins Take the lead

Stablecoins are digital tokens that are pegged to a decree currentness that act as hedging mechanisms against the potential refuse of underlie cryptocurrency collateral prices—and they may just be the industry ‘s best promise going into 2021 .

Stablecoins may see growth next class for two reasons : one, a result of the long-run instability of non-centralized tokens ; and two, the stream drawing card in the stablecoin industry, leash, is positioned to be dethroned .

As one of the earliest stablecoins to reach the mainstream, Tether ( USDT ) has suffered a number of highly publicized growing pains while the sub-industry develop. other stablecoins have already entered the discipline, aiming to wrench away its dominance .

What Do We Know for Sure ?

While it ‘s unmanageable to say which, if any, digital currencies will see dramatic price gains in 2021, we can say with confidence that cryptocurrency is not going away anytime soon. Blockchain, the underlying engineering behind many cryptocurrencies, has spread far outside of the digital currency diligence and is likely to see new applications this year. Governments and regulators will continue to grapple with how to best help and dominance digital tokens .

The flower of cryptocurrencies may have come and gone, but it ‘s besides possible that the crypto market however has a fortune of upsides to go. We do know one thing for sure : cryptocurrencies were once positioned to upend the stallion fiscal system. That kind of randomness does n’t disappear overnight, so expect to hear from cryptocurrency—or at least its number-one fans—for another year at least .

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