Where Is Cryptocurrency Headed In 2021?

The popularity of cryptocurrency has grown past its tipping point and most of the people that were taking the “wait and see” approach have decided to make a move. This is particularly so for institutional investors. But, what exactly does that mean for cryptocurrency in 2021? Is 2021 going to be the year of stability for cryptocurrency, or will this be the year that the bubble bursts?

Cryptocurrency is Here to Stay

We would like to start by dispelling all your negative thoughts by making a statement: Cryptocurrency is here to stay. You can quote us on this and we stand by every word. Cryptocurrency has grown past its tipping point. Sure, we expect to see some cryptocurrencies collapse in the coming years, but cryptocurrency as a whole has taken its hold as an established industry. With popular cryptocurrencies such as Bitcoin and Ethereum in the lead, we expect to see a rise in more cryptocurrencies. The reason we are so confident is because of the growth of blockchain technology. While blockchain is arguably still in its infancy, the growth it has shown and is expected to show is impressive. Since cryptocurrency is the only industry that currently relies entirely on blockchain, then its growth is tied directly to that of blockchain. More importantly, investors are growing past the point where they still treat cryptocurrency as a proof of concept and are starting to realize it holds its own weight.

Institutional Investment

2021 is expected to be the year where a lot of institutions make a move on cryptocurrency. Since 2018, institutions have been sustaining the crypto industry. Many financial institutions took the leap to invest in cryptocurrency once it showed a measure of stability. In 2021, we expect that more institutions will step in to invest in crypto. In the past, investors had few choices to make, which didn’t inspire a lot of confidence in cryptocurrency as an investment target. However, the growth of Ethereum, Tether, Litecoin, and similar cryptocurrencies as strong contenders against Bitcoin shows the potential for the growth of the industry. More importantly, it proves that the crypto craze is more than just a passing fancy for users and investors are starting to take that seriously. 

Case in point, Mastercard, is expected to allow its customers to make payments through cryptocurrency later this year. Although Mastercard had allowed its users to make trades through cryptocurrencies, the number of acceptable cryptos was limited. Additionally, the trades would only come into play after the cryptos were converted to fiat currency. The new move aims to allow crypto to crypto transfers and transfers of similar nature, without having to defer to fiat currency.

The nature of most businesses and trades currently in existence is that they rely on fiat currency as a sort of middleman for crypto trading. However, with moves from financial investors such as MasterCard, we can see the budding potential for the crypto industry to grow into its own reliable self-sustaining industry. Nevertheless, while we expect such moves to start this year, this is still something that will be in its budding stages for quite some time and will perhaps be realized in the coming years.

ETF Inroads

Over the years, there has been a call for Bitcoin Exchange-Traded funds (ETFs). Currently, there is an increased interest in the matter, especially after Canada set up North America’s first true Bitcoin ETF. Why should you be concerned with this? And what does that mean for the future of crypto? For starters, while this doesn’t apply to all cryptos, it is an excellent precedent. If this can be applied to Bitcoin, then it is just a matter of time before it spreads to other cryptocurrencies. Additionally, the Canadian adoption of a crypto ETF means that the U.S. will not be too far behind.

This move goes to show that market oversight, audit, and efficiency have grown considerably, which for investors means that there are far fewer risks. In fact, with this new ETF, it is expected that there will be an increase in investors for cryptocurrency. For the average user, it means that you can now use Bitcoin without having the need for a wallet or to trade directly for it. This in itself is a big deal because a lot of people are concerned with the nature of cryptocurrency but still want to use it. This allows you to avoid a significant percentage of the risk, but still invest in cryptocurrency all the same.

Overall Industrial Growth

2021 is the year we expected the crypto industry to grow as a whole. In recent years, we have been measuring cryptos against each other, especially when it comes to how well other popular cryptos fare against Bitcoin. Although it was inevitable, it also took away the focus from the big picture. Currently, investors have started to look into and focus on the crypto industry as a whole. Part of this is due to the growth of blockchain, but another part is due to the stability of various cryptos. That’s not to say we won’t or shouldn’t compare them but rather that the focus should be on the overall growth of the crypto industry as a self-sustaining financial industry.

Governmental Involvement

Ever since the crypto industry established itself as an alternative to fiat currency, governments have been trying to make moves on the same. Some governments have outright banned the entire industry, such as India. However, others are still trying to find ways to play a part in the industry, especially a regulatory one. Since it is impossible to set up a proper ETF without a way to regulate the currency, then it can be said that there has been some success in this endeavor. It is expected that they will keep at it in 2021, especially if more investors get involved in the crypto industry.

The Takeaway

2021 is expected to be a year of all-around growth for cryptocurrency, and a prime time to invest in the same. Nevertheless, you shouldn’t just jump into the wagon without carrying out your due diligence. After all, the one slogan that you should pay absolute attention to when investing in cryptocurrency is “Buyer Beware”.

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