2021’s Most Crucial Bitcoin Predictions
Bitcoin predictions for 2021 are completely based on market trends and cryptocurrency market data.
The value of Bitcoin has soared drastically so far this year, and the price of Bitcoin climbed above $61,000 in March 2021. The digital coin is now trading at $57,000 (as of April 19), and the value of the cryptocurrency market has topped $2 trillion. Bitcoin accounts for more than 50% of the entire market cap of cryptocurrencies, and the value of bitcoin has rallied 100% in 2021 alone. These market trends have helped the cryptocurrency market to drive higher.
The price of Bitcoin is constantly fluctuating – generally in an upward direction – here are the top 5 bitcoin predictions of 2021:
2020 witnessed a striking evolution in the adaptation of Bitcoin. Major fintech companies like Square Inc. invested $50 million in Bitcoin, and PayPal introduced a buy and sell option of the digital currency on their platform. This trend continued in 2021 with Tesla buying $1.5 billion worth of Bitcoins and introducing a Bitcoin payment method for Tesla cars. Elon Musk’s support for the digital currency shook the crypto market, and it is one of the reasons why Bitcoin is trending high on the market.
Recently, Mastercard also announced that Bitcoin and other cryptocurrencies will be added to their checkout counter. This proves that Bitcoin is all set to be part of our daily lives, and in the latter half of 2021, more and more leading corporations will be added to the list.
Competition from Tech Giants
When Bitcoin was first introduced in the world, not many people were interested in investing in it. But now the digital currency has accomplished the goal of being a revolutionary payment method and a mode of value storage. This has forced a lot of major global entities to think about offering their own international digital currency.
Companies that are involved in the payment space have realized there is a huge market for digital currencies because the system is fast and convenient as compared to fiat currencies. Bitcoin has demonstrated that a digital currency can help in streamlining the complex fiat transaction process.
Last year, Facebook moved forward with its big digital currency plan with Diem. Although Diem is not the same as Bitcoin, if it is launched as expected, it may eat a little into Bitcoin’s growth.
Central Bank’s Digital Currency
In 2020, a survey report issued by the Bank for International Settlements indicated that 80 % of central banks in the world are working on some form of digital currency. China is the first one to do so and has launched various pilot projects around the country to allow residents to test the digital yuan with retailers. Also, the People’s Bank of China (PBOC) has announced they will test the digital currency at the Beijing Olympics in 2022 with foreign visitors.
Most recently, the UK has also stepped onto the digital currency bandwagon by launching a special task force to explore the benefits and risks of digital currencies. As these countries are acknowledging the existence of digital money, it is likely that soon Bitcoin may experience a cut in demand.
New Regulatory on the Way
President Biden’s administration has appointed Gary Gensler as the new chairman of the SEC. He is expected to focus on climate change and cryptocurrencies among other issues. Gensler has also served as a professor at MIT and has a better understanding of digital asset classes. So, it is assumed that in 2021, Biden along with the SEC, will come up with a comprehensive and rational way of regulating cryptocurrencies to address the concerns of anonymity and fraud.
Constant Price Volatility
The Bitcoin value is not linked to any fiscal or monetary policies; therefore, it is difficult to explain the reason behind the appreciation and depreciation of the value. As an investment option, Bitcoin is risky due to the market volatility. Some say the price of Bitcoin will rise as high as $100,000 in 2021. Although it seems extreme, if anyone is planning to invest in digital currency, they must be prepared to experience market fluctuations.
Of course, the price can also head in the opposite direction, but one thing is for sure that in 2021, the wild ride of 2020 will be repeated, and we can already see that happening.
It is too early to say how the Bitcoin market will behave in the coming months, but it is evident that the future of digital currencies is bright and has immense potential for transforming the world of currencies.