The year 2021 will be important for cryptocurrencies from several points of view. It is estimated that Bitcoin and other currencies will reach their historical maximum values if the economic recovery after the coronavirus occurs the way it is planned. In addition, the steps for widespread adoption are being taken, with a greater number of interested investors.
Until now, all regulatory bodies preferred ignore cryptocurrencies or simply belittle them, classifying them as a bubble. However, the strength of the market and the growing interest of the world's population in adopting them as a means of international payment due to their decentralized characteristics make governments look at them closely.
From a legal point of view, new laws and regulations related to digital assets are created in different countries, although some are negative. For example, Russia has presented the project of the first cryptocurrency law, which establishes a fine and a seven-year prison sentence for those who carry out operations with Bitcoin and transfers to Russian banks.
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Sustained growth, legislation and increased global adoption
One of the most important factors in the growth of both Bitcoin and Dash, Ethereum, Litecoin and other cryptocurrencies, has been the increase in the participation of institutional investors in the market, causing the accumulation of digital currencies to increase considerably, limiting supply and putting upward pressure on their value.
So what can we expect from the cryptocurrency industry in 2021? The most important thing in the picture is that a prolonged upward trend is coming for Bitcoin, confirmed by some projections such as the one recently published by Citibank analysts, who estimate an approximate value of USD $318.000 for BTC during 2021.
Similar projections are found in the future price forecasts made for Dash. If you are wondering what Dash is, it is an alternative cryptocurrency to Bitcoin and of great importance in the market because it is focused on the speed of operations and increasing the level of security in the Blockchain chain, being considered the natural successor.
Regarding legislation, the first cryptocurrency law was presented in the Russian parliament, and if approved, significant penalties would be established for any person or company that decides to use Bitcoin in financial transactions, both domestic and international.
Five factors that make a drastic rise in Bitcoin likely in 2021
There are some factors that seem to suggest a growth in the BTC price for next 2021, with a prolonged rise that ends up establishing new record prices, always maintaining the characteristic volatility of this digital asset. The post-pandemic economic recoveryNow that we have two potential vaccines, these are some incentives.
Strong BTC accumulation
El Bitcoin supply hasn't moved much over the last year, remaining at 61%, which would show that there is little interest in selling the coins at the current price, so it will be quite likely that the supply will be contained until the value increases according to the expected levels. Something similar happens with the rest of cryptocurrencies, .
Institutional investors investing constantly
The phenomenon of institutional investors has been around since 2019. For example, the assets managed by Grayscale Bitcoin Trust They increased from 1.577 million dollars to 3.541 million dollars, which suggests an increase in demand from large investors, which will pressure the price upward.
Optimism about global economic performance
Certainly the pandemic had a profound and negative impact on the world economy throughout the year and cryptocurrencies have prices closely linked to economic behavior. With the news of two vaccines with more than 90% effectiveness, the expectation for the end of the pandemic fills those with optimism. economic factors.
Bitcoin Halving 2020
El halving refers to the programmed contraction of the supply of new units of Bitcoin, limiting the inflation of the currency and therefore its long-term availability, which increases its value. In 2020 there was a scheduled halving after this, it is normal for a “rally”, or increase in the price of quotes, at least in theory.
Dollar weakness
It is no secret to anyone that many coins have lost value due to the constant impression of new banknotes. These weaknesses of the dollar and the euro become a strength for Bitcoin and the rest of the cryptocurrencies.
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