Rohan Mathawan
When any nation’s history is written, the year 2020 will occupy a particular chapter with multiple social-economic difficulties. In that year, most of the world’s economies came to a standstill. The pandemic had brought untold suffering, and many people succumbed to the pandemic. Amidst these tribulations, the year had some positive news in some areas, like cryptocurrency and blockchain technology. Those who invested in this sector are now enjoying handsome returns as the BTC price surged. You can also invest with bitcoin storm and start your journey of joining the club of millionaires. Information on how the year 2021 will look like and what to expect on the crypto and blockchain landscape can also help you make educated decisions.
Expect more growth in 2021
The year 2020 saw the crypto market laying the foundation for exponential growth expected to last way beyond 2021. What an accelerated growth! First, businesses lacked other options than to embrace blockchain technology and cryptocurrency to stay relevant in the industry. Again, remember the working environment changed, which meant more investment in digital currency. Thus, blockchain served as a viable option.
Further, the COVID19 restrictions discouraged hard cash exchanges to reduce the spread of the virus. Against this backdrop, individuals and businesses started warming up to blockchain technology as the best method for securing cashless transactions. According to statistics, the blockchain market experienced rapid growth from USD3.0 billion in 2020, and the upward trend continues. It’s expected that it may hit USD 39.7 billion by the year 2025. So expect the cryptocurrency market to score a 67.3% Compound Annual Growth Rate (CAGR) for 2020-2025.
We anticipate more growth in the digital currency space, which is powered by blockchain technology. And more companies and individuals are expected to embrace digital currency this year. For example, predictions show that by 2022, 25% of Forbes Global 2000 will be using blockchain technology for digital transactions.
COVID19 is pushing the world further in the blockchain transition
The world is still facing COVID19 as a matter of global health concern. Many nations are reporting that strains of COVID19 viruses are capable of mutating to dangerous levels. This shows that the value of blockchain technology will keep rising this year.
Thus, predictions show a 90% increment of blockchain projects in the market for the year 2021. The growth will become more prevalent as the nation’s push for more decentralization, smart contracts, and tokenization as a mechanism of mitigating cash transfers.
Therefore, the globe is looking into a market where blockchain projects will accelerate at supersonic rates. More multinational companies will embrace blockchain projects to enable international transfers while cautioning the business from the fluctuating money markets.
The push will see 30% of the blockchain projects enter the production stage as the COVID19 menace pushes corporate to ditch long term projects in favor of short, actionable achievements. These factors are likely to impact the cryptocurrency market structure, leading to unexpected regulations and follow-up by world financial players.
More progressive regulations in the crypto market
By 2021, the highly volatile and non-regulated cryptocurrency market will face significant government controls. The growth and adoption will attract particular scrutiny from financial regulators, such as the UK’s Financial Conduct Authority and the US’s Securities and Exchange Commission (SEC). The specific purpose of these organizations is to crack down on illegal businesses. Therefore, the crypto market and blockchain technology face some regulations and follow up by the financial governing bodies.
The move will see further growth in the distributed ledger technology (DLT) and the digital assets as regulators advocate for open-source protocols. As awareness grows and more regulators enter the crypto market, expect tremendous and sustainable cryptocurrency growth from 2021 and the future.
Remember, the battle for regulation begun when FinCEN proposed new guidelines for the cryptocurrency self-hosted wallets. While the FinCen actions are seen as unjustified and rushed, it indicates more productive rules and progressive dialogue for the digital currency market regulations. Again, the Office of the Comptroller of the Currency (OCC)’s current directions show increased possibilities for the cryptocurrency market regulation now and in the future.
China may take the lead as financial institutions dominate the market.
Currently, the Chinese government is facing fewer financial shakeups compared to other nations in the world. It seems that blockchain technology is taking over the Chinese market. The growth is positioning the country at the edge of global competitiveness. So expect new investments and infrastructures as China forms the basis for Blockchain Service Network. Ideally, 2021 will see blockchain become a Chinese integrated segment of the public infrastructural network. The move will cause other nations in Europe and America to embrace digital currency, thus creating a non reversal boom in the cryptocurrency market.
Likewise, the financial sectors and banking institutions are likely to embrace the cryptocurrency market. These sectors may turn to digital currency as a future buffer against such economic shakeups currently witnessed in many economies. The influx of financial institutions in the digital currency is further strengthened by the merger between blockchain technology and fintech. The two will streamline the cryptocurrency operations to stable levels that will be embraced in every global economic sector. Thus, the banking and the financial sectors will adopt exponential growth that will position cryptocurrency at unexpected growth curves in all nations.
Expect more non-traditional financial institutions.
As discussed earlier, COVID19 is causing a change in the financial sector. While the pandemic has brought untold suffering to people and institutions, it creates an enabling environment for faster cryptocurrency growth. In this respect, non-financial institutions are likely to come up as corporates change their models and financial functions to blockchain-based services. Thus, the world will witness non-bank lenders that invest in decentralized systems enabled through blockchain technology.
Therefore, the concept of tokenization will take over, which means the conversion of physical assets into distributed ledgers that are issued by non-traditional lenders. The practice will become prominent as distributed ledger technologies (DLTs) take over the non-financial assets, commodities, and security.
The world will witness more challenges of asset tokenization as cryptocurrency transactions take over. The elements of pricing, liquidity, and trading will change concerning the digital currency’s value. The world will also need a tokenized environment to stand as the custodian between the market and the traders. All these factors will have implications on policies and many other functions.
Bitcoin threatening gold and a possible takeover are in the offing.
The world is going to face a big brawl between bitcoin and gold. Remember, gold’s supremacy has run for centuries. However, the narrative may soon end. The precious metal will easily convert to digital currency as cryptocurrency becomes the only haven. So in 2021, expect bitcoin to double and become more stable than ever before.
The growth move will attract government authorities to generate extra income from taxes. And thus, any bitcoin investors in the UK and the US should brace for revenue regulations. It will cause individuals to declare their crypto holding, making the market more secure and accurate.
Expect more SMEs to embrace blockchain technologies and start investing in bitcoin. The trend will always be uptrend as the world enters the new digital currency phase. Thus, the financial and banking sectors will be the largest shareholders in blockchain technologies, which converts all aspects of human life to digital currency. The future is digital.
New Safe havens
Some investors may turn overseas to hide their assets from the taxman. Blockchain technology may give such investors a comfortable and safe haven for their investment assets.
Before adequate regulations occur, the world will witness Asia coming up to take over the blockchain technologies and struggling to retain supremacy in the global super wars. Many trade wars in the digital markets will take place geared to discourage Asia’s dominance in the market, which is likely to grow the small traders and retail business in the digital currency.
Regulations will be prominent, and many nations will crave for the digital currency to remain relevant in the money market. Thus, cryptocurrency and blockchain technology is set to revolutionize the world and its way of conducting business. Thousands will be displaced due to a lack of digital integration and internet connections, and digital currency.
Bottom Line
The bitcoin market is thriving in 2021. The growth shows a consistent bullish trend, and this is an excellent time to invest more in bitcoin. Also, the fluctuations are likely to reduce as large investors offer safe environments for retailers and small businesses to enter the market.
Expect digital currency to be the utmost currency of exchange that will standardize all nations. Hence, 2021 will lay a firm foundation for the growth and expansion of digital currency. It will be the year of many investors, governments, and institutions coming into the market with a boom. Bitcoin and blockchain technology will no longer be like in 2019. It’s growing in prominence and adoption, and thus, the best time to invest is now.