This year has been a crazy trip for those involved in or even just watching the Bitcoin market. The most expensive virtual currency in the world was exchanged for more than $23,000 in December.
Bitcoin was around $4,000 when the U.S. first started dealing with Covid-19 in early March. It’s a gut-twisting cause of profits and losses for owners or buyers. It’s a fun business display for those (like me) on the sidelines, with tinges of envy and dizziness.
Despite this massive fluctuation in Bitcoin values — usually in the upward direction — 2020 has been a remarkably mature year for an asset just a decade at all. Here are the leading Bitcoin developments in 2021.
More Mainstream Acceptance
Bitcoin usage in daily life has always had a chicken-egg problem: very few use it or support it since… very few use or accept it for one thing.
Yet, there was a remarkable growth of bitcoin adaptation in 2020. A seal of approval was issued by influential fintech firms, from Square’s $50 million investment in bitcoin to PayPal, enabling its customers to purchase and sell bitcoin.
We’ll potentially see an expansion of this mainstream welcome in 2021. Look for at least one big U.S. or European bank to announce a system to either encourage Bitcoin sales or plan to retain their customers with digital currencies.
Competition From Big Tech
In its decade of life, whatever bitcoin may or may not have done, it has forced several large corporate companies to worry about providing a foreign digital currency.
In addition to recognizing that there is a demand for digital payments still up for grabs, any organization participating in the payment sector knows that settlements involving multiple currency markets have the most promise. That’s because these transfers can take days to conclude at the time and also require high costs.
Bitcoin has proven, embryonically, that a global digital currency can drastically simplify this mechanism. This year, both Facebook and Google, companies with a sizeable foreign footprint that Bitcoin can only dream of, have moved ahead with comprehensive digital currency aspirations.
Software deals like Diem from Facebook aren’t quite the same as bitcoin, but if they start catching on in 2021, they may eat a little bit into bitcoin growth.
Competition From Central Bank
A study and survey were released this year by the Bank for International Settlements showing that 80 percent of the world’s central banks operate on digital currency.
China has taken the experiment on digital currencies well beyond any other country. A lottery was recently held in Suzhou’s eastern Chinese city, just west of Shanghai, where 100,000 citizens got 200 renminbi (about $30) each from a digital wallet. They were allowed to connect their digital cash to their bank accounts, and it vanished if they didn’t spend their digital money after a few weeks, all perfect strategies for progressing the experiment.
It is expected to undercut demand for bitcoin and other independent cryptocurrencies as China steps toward the digital yuan’s national adaptation. Related studies in other nations can be seen next year.
A New Regulatory Playing Field
President-elect Joe Biden’s presidency will have higher goals in the early 90 days than those of crypto-monetary control. The atmosphere and know-how of Congress are hard to read, of course.
The natural presumption is that Biden would be “good for cryptocurrency” as a Democratic government regulates with more incredible rigors than a republican government, although others have stated.
Maybe, however, Bitcoin fans prefer to neglect topics such as anonymity and the alleged use in fraud; both are important problems for regulators.
Biden’s team could find a more thorough and reasonable approach to control cryptocurrencies, but I will not bet on favoritism in specific against bitcoin.
As bitcoin’s value is not explicitly related to any specific real-world phenomena (e.g., economic or monetary policy), it may be valued or depreciated in forms that are impossible to forecast or even describe.
This makes it impossible to recommend as an investment to someone who hopes to prevent significant losses. Some analysts claim that Bitcoin will hit $50,000 next year, and while it seems extreme, it is not unquestionable if investors move the capital from other investments to Bitcoin.
Naturally, in 2021 the price is as much as possible, heading in the opposite direction. The crazy trip in 2020 is going to repeat – it hits too hard.