The Future State of Cryptocurrency: 3 Post-2021 Predictions
Cryptocurrency jumped out of the box with the birth of Bitcoin back in 2009, which led to the eruption of other currencies including Ethereum, Dogecoin, and XRP. Since then, cryptocurrency has met mass scepticism and association with cybercriminals. However, in recent years, as people begin to understand blockchain and become accustomed to online transactions, the popularity of cryptocurrency has exploded. Retail giants and banking corporations are beginning to accept crypto as a payment method. Although cryptocurrency is gaining recognition, there’s still a long way to go before it’s adopted everywhere. Given the nature of cryptocurrency, the market is volatile, making it a risky investment. If you want to learn more about cryptocurrency and find out where it’s heading, carry on reading.
What Is Cryptocurrency?
Cryptocurrency refers to the decentralised digital currency that runs on a blockchain network. By making transactions using cryptocurrency, you can guarantee your payment is secure and your identity is partially hidden. The most well-known and valuable cryptocurrency is Bitcoin (BTC), followed closely by Ethereum (ETH).
We mentioned that crypto runs on a blockchain, but what do we mean by that? A blockchain is an online ledger used to store information. On blockchain networks, a ledger is held and replicated across all devices with access. Every time a transaction takes place, a block is created, added to the ledger, validated, and encrypted. The more blocks there are on a blockchain, the more secure it will be. The encryption levels on the blocks mean that only those with access to the network can view information. All people with access to a blockchain can view all transactions. However, they can’t be altered. If a cybercriminal did manage to breach the chain, everyone in the network would be aware. It is the encryption, decentralisation, and anonymity that make cryptocurrencies appealing.
When people invest in cryptocurrency, they are held in a wallet to keep them secure. Further, there are several crypto trackers out there to help people understand what to do with their investments. For instance, if BTC will yield more real-life money than ETH, you can convert ETH to BTC with minimal fees through Paxful. All you need to do is sign up, pick your crypto and search through the offers. Then, once you have agreed to transfer, the BTC will release and hit your wallet instantly.
The State of Cryptocurrency in 2021
2021 has been a fruitful year for cryptocurrencies, with many of them becoming more valuable than ever before. Not only has cryptocurrency worth grown, but the size of the market has also blown up exponentially. Every day, thousands of users are flocking to the crypto channels to try their hands at investment. Interestingly, despite the surge in value, crypto experts predict that the worth will increase further before the year is out.
With new cryptocurrencies being invented and people being stuck at home during the pandemic, the market explosion increased crypto trade availability. Therefore, there has been an enormous influx of trading sites. This is the same concept as being abroad and needing to exchange your currency. If there was only one exchange, the prices would be high and the service slow.
EFT Approval for Crypto
In a ground-breaking achievement, the first US-based Bitcoin exchange-traded fund (EFT) was launched. This means that crypto funds will open on the New York stock exchange and be readily available to investors. This milestone, achieved by ProShares, means that the value of Bitcoin is set to skyrocket even further.
One of the largest barriers to cryptocurrency is the lack of regulation. More specifically, global lawmakers are trying to work out how to make crypto unattractive for cybercriminals and more appealing for investors. Currently, the use of cryptocurrency could allow investors to evade tax. Therefore, policies to help the HM Revenue and other bodies track the crypto trade is needed before cryptocurrency can be adopted any further. Although it will take time, experts suggest that they will be able to regulate the crypto trade, with ideas including the issuing of relevant tax forms by exchanges. Once the crypto trade industry can be regulated, it will boost investor confidence and can lead to further surges in trade.
Widespread Crypto Adoption
Mainstream businesses have already begun looking into Bitcoin, and in some cases have already invested. For example, The Walking Dead studio (AMC), announced that it’s looking to accept Bitcoin by the end of the year. Further, fintech businesses including PayPal have started to dabble in crypto. Paying for items using cryptocurrency seems absurd at the moment because we’re not conditioned for it. However, if more retailers begin accepting Bitcoin, more people will begin to accept cryptocurrency as a viable payment option. Although the tides are turning, there is still a long way until cryptocurrency investments are deemed smart.
Bitcoin’s Future Prospects
As the leading cryptocurrency on the market, Bitcoin is the largest indicator of where the overall market is heading. Throughout 2021, Bitcoin’s worth has fluctuated between $60,000, $30,000, and $50,000. With this in mind, investors should still keep their Bitcoin stock to less than 5%. If you invest in Bitcoin, you need to accept that you may lose everything. When you’re investing in Bitcoin, we suggest you play the long game and wait out the value rollercoaster. We’ve already seen that cryptocurrency is becoming accepted. You should invest your Bitcoin and put it away until the market is ready for you to reap your reward.
Cryptocurrencies offer a decentralised currency run off a blockchain, which offers complete security. The world is at its early days when it comes to cryptocurrency, despite more retailers and banks beginning to accept it as a payment method. One of the major issues faced in cryptocurrency’s growth is the lack of regulation. If tax agencies can figure out a means of tracking activity, user confidence will begin to increase. Although we can see crypto values rising right now, it’s impossible to guess where they will be in the distant future.