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2020 has been a banner year for Bitcoin and many of the Alt-Coins. Experts point to the destabilizing effects of the pandemic and innovations in blockchain technology to explain the meteoric rise of cryptocurrency value and acceptance.
Many of these trends are going to be a long-term backwind for BTC. Let’s take a look ahead to 2021 to see which trends we can expect to propel the cash of the future into the future.
Expect Mainstream Acceptance
For a long time, we have been trying to break into the cyclical logic. People do not buy BTC because it is not accepted. And businesses do not build the infrastructure to accept it because no one has it. That is changing fast as it becomes an increasingly accepted deposit method at online betting sites, Home Depot, and hotels.
While we have been getting more acceptance in drips and drops, this year big names jumped on board. PayPal is perhaps the biggest name of 2020 to begin accepting and moving BTC. While e-wallets such as Revolut are jumping on the wagon, in 2021 you can expect at least one major global bank to open up a cryptocurrency system.
And this will be huge! Once this is announced, all you BTC investors out there will be a lot richer.
More Institutional Investment
A big part of the bull run over the last year has been an influx of cash from investment banks and hedge funds. These are big players who can move a lot of money, soaking up supply and driving up prices.
With the extreme narrative shift we have seen in 2020, it is likely they will continue to be bullish into 2021. With the US printing money to stimulate the economy, it is no wonder smart investors continue to plan on investing in Bitcoin with its stable and predictable supply.
In fact, Bitcoin mining was recently halved, slowly the seedy drip of Bitcoin until eventually, none will be coming out anymore. The US monetary policy has been a great advertisement for Bitcoin.
Decentralized Finance, or DeFi, has been a huge innovation in 2020 and one of the biggest trends behind the growth in value of Alt-Coins. DeFi allows us to carry out complex financial interactions, such as speculating, lending, or borrowing funds all without a centralized financial institution.
Instead, they use block-chain and smart contracts. The most popular DeFi platform is Ethereum which has seen nearly twice as much growth as Bitcoin itself. This trend is likely to continue as regulatory pressure also legitimizes the market.
Competition from Central Banks
With great success of course comes competition. People want to get in on BTC’s secret and profit. By some accounts, 80% of world central banks are exploring digital currency. They have seen it be successful and are especially eager to use its limited supply as a way to ease financial crises and run on physical bills.
China has already launched a central bank digital currency. However, it is currently in an experimental, regional setting. When China goes nationwide with its digital Yuan, we could expect to see a big hit to Bitcoin demand. This is one trend perhaps working against the value of BTC. But we shouldn’t be surprised to see it lead to even more increased acceptance.
Just like has always been the story with digital currencies, expect ups and downs. Even in this boom year, assets can rise or fall 10% in a day. It is best not to look at it too much, as it can be easy to get really nervous.
Some experts predict a rise to $50,000 per BTC. We can hope! But trends in BTC value are hard or impossible to predict.