Where Is the Cryptocurrency Industry Headed in 2021?

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

To get a sense of precisely how troubling the market had been, just search to 2018 : Heading into 2018, Bitcoin traded for close up to $ 13,500 after reaching an all-time high of $ 19,783.06 in December of 2017. It subsequently dropped a moo as $ 3,400, a loss of about three-quarters of its value—and other 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 just $ 91 by December 2018 before rallying back to over $ 450 by the end of 2020.

Cryptocurrencies like Bitcoin and Ethereum have indeed proven resilient. investor interest, both retail and institutional, in digital currencies has risen dramatically in holocene months. many early investors who were tidal bore to make gains from the “ cryptocurrency craze ” have since moved on to other ventures, leaving a smaller group of loyalist HODL -ers behind. But there are still reasons to believe that the cryptocurrency diligence 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 about $ 700. now, looking into the end of 2020 into 2021, the better motion might be how this outer space will adapt in order 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 figures for individual investors are down in many cases, institutions are climbing on board in a significant means for the first time. institutional investors allow for significantly larger trade volumes than most individual investors, meaning that even if fewer trade partners are transacting in the digital currentness space, the industry can placid sustain itself .

There are several potential developments projected to take rate in 2020 and 2021 that could significantly impact institutional participation in the digital currency market. If crypto is floated on the Nasdaq or a similar exchange, for case, it will immediately get a boost in reputation—and probable, rate .

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 provider VanEck, has seen its concluding approval decision pushed back again and again.

Some analysts believe that the blessing of a mainstream Bitcoin ETF could provide a significant jolt to the digital currency global, opening up the industry to investors eager to participate without some of the risks associated with buying and selling tokens directly. As of now, though, the future of VanEck ‘s fund remains to be seen .

Stablecoins Take the run

Stablecoins are digital tokens that are pegged to a decree currency that act as hedging mechanisms against the electric potential refuse of implicit in cryptocurrency collateral prices—and they may merely be the industry ‘s best hope going into 2021 .

Stablecoins may see growth next year for two reasons : one, a result of the long-run instability of non-centralized tokens ; and two, the current leader in the stablecoin diligence, 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 developed. other stablecoins have already entered the field, aiming to wrench away its authority .

What Do We Know for Sure ?

While it ‘s difficult to say which, if any, digital currencies will see dramatic price gains in 2021, we can say with assurance that cryptocurrency is not going away anytime soon. Blockchain, the underlying technology behind many cryptocurrencies, has spread far outside of the digital currency industry and is probably to see new applications this year. Governments and regulators will continue to grapple with how to best facilitate and control digital tokens .

The flower of cryptocurrencies may have come and gone, but it ‘s besides possible that the crypto grocery store inactive has a lot of upsides to go. We do know one thing for indisputable : cryptocurrencies were once positioned to upend the entire fiscal system. That kind of noise does n’t disappear overnight, indeed ask to hear from cryptocurrency—or at least its number-one fans—for another class at least .

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