Do you wish to know if investing in Bitcoins can prove to be fruitful for you in 2021? If so, it may help to know some key Bitcoin predictions as put forward by financial experts. The past year had seen an enormous surge in Bitcoin values, with prices of this digital asset hovering around $28,000 in December. At the time when the Covid pandemic struck the United States, Bitcoin prices were only about $4000 but things soon started to change as the pandemic continued and other investment options started showing signs of decline. Although Bitcoin prices did fluctuate throughout the past year, 2020 was the year when this cryptocurrency actually gained maturity even though it had been around for more than a decade. Here are some of the top critical predictions for the Bitcoin for this year:
- According to experts, Bitcoin will slowly gain mainstream acceptance. So, unlike earlier, when people did not use Bitcoins simply because not many people were adopting the currency, things will change from now onwards. The big fin-tech companies like PayPal and Square have shown their interest in embracing this digital currency. While PayPal has encouraged its clients to purchase and sell Bitcoins, Square has made an investment to the tune of $50 million in BTC. This trend is likely to continue and Bitcoins will enjoy and even wider global reach with more and more businesses accepting Bitcoin as payment. Listen to what Adam Grunwerg, the Co-founder of Finixio has to say about the rise in Bitcoin trade.
- As Joe Biden looks all set to take over the American presidency, it is believed that a Democrat administration will regulate cryptocurrencies more stringently than did the Republics. At the same time, people are hopeful that Biden will prove positive for the crypto world. Biden’s team could introduce a far more rational and comprehensive manner of regulating digital assets in general. Bitcoin advocates and enthusiasts are not much concerned about the likelihood of frauds or issues like privacy and anonymity.
- Another key prediction for the Bitcoin is that it is likely to face competition from centralized banks in 2021. The Bank for International Settlements has come out with a report that indicates that almost 80% of central banks across the globe are working to incorporate some type of a digital currency. For instance, in the Chinese city of Suzhou, 100,000 residents took part in a lottery and received 200 renminbi through digital wallets. They had to link this to their accounts and were told that the digital money would vanish if they did not use it up in a few weeks time. China is gearing towards acceptance of the digital Yuan and this may hamper demand for Bitcoins and other digital coins.
- Besides the competition from centralized banks, the Bitcoin will also be met with competition from the big tech companies. All companies offering payment services realize that the market is booming and payments that involve different currencies can often take long to go through, often entailing steep fees also. This is where Bitcoin gives a huge advantage by significantly streamlining this process. Following close in its footsteps, both Google and Facebook are dabbling with currency ideas.
Finally, Bitcoin will continue to be marked by volatility. This digital asset is not connected to any fiscal policy and its values can go up or fall down in ways that cannot be explained or predicted easily. So, for investors, it can be difficult to avoid colossal losses.