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In the last few years, cryptocurrency has undoubtedly become a global phenomenon. Although many skeptics put off the idea of a decentralized, digital currency in its preliminary stages, its resilience proved superior. Bitcoin is worth more than 50,000 dollars as of the eleventh of March 2021. However, before receiving this incredible feat, the crypto giant saw tons of criticism. Even tech billionaire and philanthropist Jack Ma said that bitcoin was just a bubble back in 2018. While these significant strides are generally positive news, many crypto enthusiasts are still worried about the volatility of cryptocurrencies.
Cryptocurrency trading has become more prevalent these days, with exchange platforms emerging every day. However, it can be hard to invest in a financial asset without having an idea of what the future holds for it. Therefore, if you’re among those who hopped on the crypto bandwagon because you were following the crowd, you need to change your priorities. If you’re looking to make the most out of your cryptocurrency investment, you need to establish a plan in line with their future performance. This article discusses what the future holds for bitcoin and other cryptocurrencies by looking at their overall performance.
Looking Back at The Rise of Cryptocurrency
To get a glimpse of what the future holds for bitcoin and other cryptocurrencies, we first need to analyze their journey so far. Looking at how cryptos have been performing, it’s safe to say that digital currencies are very volatile. In 2018, bitcoin and its closest rival, Ethereum, set new records of 19,783 dollars and 1,300 dollars, respectively. However, by the end of the year, both had dropped in value significantly; bitcoin was at 3,400 dollars, and Ethereum was at a mere 91 dollars. Even so, these financial assets have proven themselves worthy as they have bounced back and attained incredible new records. While we continue to speculate the future of crypto trading, factors such as these are worth keeping in mind.
What Is the Forecast for Bitcoin’s Future?
As the first and most valuable cryptocurrency, bitcoin is the perfect specimen for determining the sector’s future. Going by how well bitcoin is performing in the first quarter of 2021, it’s safe to say that the future looks quite bright for the crypto behemoth. Several experts are in consensus that bitcoin has excellent potential to maintain a bullish trend throughout the year. Experts such as Citi analysts are even predicting that the digital currency might reach a value of 300,000 dollars by the end of the year. Other industry leaders have provided a less ambitious prediction of 65,000 dollars. Either way, many industry players agree that bitcoin is on an upward trend, with little chance of stopping anytime soon.
What Does This Mean for Other Cryptocurrencies?
Although the rational thing to believe is that other cryptos will follow bitcoin’s trend, people are worried that they won’t be as successful. However, given that more governments are preparing legislation and regulations concerning cryptocurrencies, we can expect to see progress in the sector. What’s more, given that there has been an upsurge of institutional investments in cryptocurrency, we can expect large trade volumes in the market.
Other Factors to Keep in Mind
Stablecoins: These are cryptocurrencies that attempt to peg their value on an external reference to avoid imminent turbulence in value. Stablecoins are likely to succeed due to the unavoidable eventual instability of decentralized currencies.
Libra: This is Facebook’s contribution to the crypto world. The tech company has the audacious ambition to circumvent the banking system using this cryptocurrency. Although many agree that the goal is admirable, there have been significant concerns that the execution is flawed.
The future of most cryptocurrencies is seemingly bright, and the market will most likely expand soon. Nevertheless, the issue of volatility doesn’t look like it’s going away anytime soon.