Can bitcoin, which broke the $23000 mark, continue its crazy rise in 2021?

In December this year, the trading price of bitcoin broke through 23000 US dollars, a record high, continuing the crazy rise in 2020. Although the price of bitcoin fluctuates greatly, it shows an upward trend. For a currency with only a 10-year history of trading, 2020 will be a fruitful year. So, how will bitcoin behave in 2021? James Ledbetter, editor of fin, recently published an article predicting the key development trends of bitcoin in 2021. 1. Bitcoin has been accepted by more mainstream people. There is always a question of whether there is a chicken or an egg before the use of bitcoin in daily life: few people use or accept bitcoin, and the main reason is that few people use or accept it. But in 2020, bitcoin’s acceptance has changed dramatically. From square (sq.us) investing 50 million US dollars to PayPal (pypl. US) allowing users to buy and sell bitcoin, well-known financial technology companies have given recognition to bitcoin. In 2021, Ledbetter believes, we may see bitcoin becoming more mainstream. At least one major bank in the US or Europe will announce a bitcoin buying system or agree to hold digital assets for customers. 2. Competition from large technology companies, whatever bitcoin has achieved in its decade of existence, has forced many large global entities to consider offering an international digital currency. Every company involved in the payment field knows that there is still room for development in the digital payment market, among which payments involving different money markets have the greatest potential. This is because at present, such transactions take several days to complete and usually involve high costs. Although still in its infancy, bitcoin has proved that a global digital currency can greatly simplify the process. This year, Facebook (FB. US) and Google (GOOG. US) have launched large-scale digital currency plans. The cryptocurrency Diem launched by Facebook is not exactly the same as bitcoin, but if they become popular in 2021, it may have an impact on the growth of bitcoin. 3. Competition from central banks this year, according to a survey released by the bank for International Settlements (BIS), 80% of the world’s central banks are studying some form of digital currency. China has gone further than any other country in the digital currency experiment. In December, Suzhou digital RMB red envelope winning results were announced. This time, Suzhou issued 20 million yuan digital RMB consumption red envelopes to eligible citizens, each with a total amount of 200 yuan (about US $30), with the number of up to 100000. These residents are encouraged to link digital cash to their bank accounts, which will disappear if they don’t spend it in a few weeks. Ledbater said demand for the bitcoin and other independent cryptocurrencies is likely to decline as China’s digital Renminbi expands across the country. Similar tests are likely to be seen in other countries next year. 4. A new regulatory environment. President elect Biden’s administration will have more important priorities than cryptocurrency regulation within 90 days of assuming office, and the attitude of the US Congress on this issue is also elusive. It’s natural to assume that the democratic government will be more tightly regulated than the Republican government, but some assert that Biden’s election will “benefit cryptocurrency.”. Ledbetter points out that bitcoin enthusiasts tend to overlook the anonymity and potential fraudulent use of cryptocurrencies, which are very serious issues for regulators. Biden’s team is likely to come up with a more comprehensive and rational way to regulate cryptocurrency, but Ledbetter doesn’t think they’ll have a particular preference for bitcoin. 5. Continued volatility because bitcoin’s value is not directly linked to any obvious real-world phenomenon (such as fiscal or monetary policy), it can appreciate or depreciate in ways that are difficult to predict or even explain. As an investment tool, bitcoin’s characteristics are hard to win the favor of investors who want to avoid huge losses. Some people think that bitcoin may be worth as much as $50000 next year. Although this may seem extreme, it is not impossible for investors to transfer money from other assets to bitcoin. Ledbetter warned that bitcoin prices could also move in the opposite direction in 2021. One thing that seems certain is that the frenzy of 2020 will repeat itself, and investors need to be cautious. (source: Zhitong finance and Economics website)

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