2021 looks really bullish for the cryptocurrency market. And even when the rallies stop, the current developments are promising that the future of Bitcoin and the future of cryptocurrency will be flourishing.
After a few bare years, the cryptocurrency market decided to show the world once again that it can go parabolic, even more than it did in 2017.
In 2018, we entered a bare market with around 1,600 cryptocurrencies, and Bitcoin plummeted to under $4,000. But 2021 starts with a full-on bull market with over 8,300 cryptocurrencies registered on Coinmarketcap, a new all-time high for Bitcoin, and an ever-growing niche that’s bound to bring even more functionalities.
Table of Contents
1. What are cryptocurrencies up to in 2021?
Looking at numbers, 2021 started as the best year for the cryptocurrency market yet. The top 10 cryptocurrencies are going parabolic and are showing more functionalities and promise than ever.
#10 Binance Coin (BNB) hovers around $50. And as a matter of fact, it already reached a new all-time high of $52.91 on February 2nd, 2021.
#9 Bitcoin Cash (BCH) hovers around $420 after reaching over $600 in January. Although not as parabolic as the other top 10’s, BCH did come a long way considering that it traded around $250 most of 2020.
#8 Litecoin (LTC) trades in February 2021 around the price of $140. It managed to reach $185 in January, and although it went down, it seems that LTC has found a support price over $120.
#7 Chainlink (LINK) trades in February 2021 around the price of $24. Chainlink is one of the cryptocurrency projects that keeps growing and going parabolic from time to time. LINK grew continuously in 2020, and as the cryptos have gone on a bull run, it naturally increased its price twice in one month.
#6 Cardano (ADA) trades in February 2021 around the price of $0.41. Some may have mixed feelings about Cardano due to delays, yet, the project successfully delivered staking in 2020 and is going forward in 2021. With the project moving on, ADA naturally appreciates and grows up with the other cryptos.
#5 POLKADOT (DOT) hoovers around $16 in February 2021. Polkadot is one of the big staking contestants that managed to keep a tight schedule. Furthermore, the project climbed the cryptocurrency hierarchy with tremendous speed, gaining the 5th position by market cap in less than a year. DOT reached its all-time high in January ($19.32).
#4 Ripple (XRP) is facing 2021 with a few difficulties but still enjoys the bull run. Since last year, XRP has been demoted to the 4th position by market cap. Yet, its price jumps in between $0.21 and $0.74. However, the SEC lawsuit, the exchange unlistings, and the promising projects closing in are really threatening XRP’s position.
#3 Tether (USDT) trades at $1 as always. In 2021 it still is the most used stablecoin, despite all critique. As the price is supposed to be stable, what’s interesting about USDT is its market cap. By February 2021, USDT enjoys a market cap of over $26.6B, which is almost 6 times more than the market cap from last year’s same period. However, there is one thing Tether might be threatened by in 2021: the STABLE Act.
#2 Ethereum (ETH) trades above $1,500 in February 2021. Also in February, Eth surpassed its old all-time high and reached further for $1,560.30. Besides the bull run, Ethereum is fully enjoying being the #1 platform supporting DeFi ascension and the launch of the staking based Ethereum 2.0.
#1 Bitcoin (BTC) trades around $34,000 in 2021. In January, BTC reached an incredible all-time high of $41,941.56, almost 2 times more than the old one. With payments providers like Paypal integrating Bitcoin and cryptocurrency spending and retail investors showing more interest in BTC, the first cryptocurrency is closer and closer to being mainstream.
What are the latest Bitcoin news?
The first thing to notice about Bitcoin is that it reached the new all-time high of $41,941.56 on January 8, 2021. And since then, it got through a correction and hovered around $33,000. This parabolic movement happened after the Bitcoin mining halving of May 2020, partially confirming the relation between the halving and the rally.
It’s essential to keep in mind that 2020 was quite eventful for cryptocurrencies, and the bull market cannot be tied only to one cause.
The decentralized finance ascension fueled the cryptocurrency loan market, encouraging traders to move around more money.
Bitcoin and other popular cryptocurrencies have become available for trading in popular mainstream applications such as Revolut and Robinhood. Retail investors and institutional investors have gotten more and more interested in Bitcoin.
The COVID-19 pandemic and the socio-political situation from the USA are threatening the American Dollar.
And last but not least, Elon Musk finally publicly declared himself a Bitcoin supporter, considering that BTC is close to broad acceptance.
2. What is the future of Bitcoin?
2021 starts with the Bitcoin Fear & Greed Index on the green side, indicating greed and extreme greed.
Price predictions for the future of Bitcoin are as diverse as ever. We have Citi’s Analysts that predict Bitcoin going to $300,000 by the end of 2021. Mike Novogratz sees $65,000 as a more realistic level. And according to the Stock-to-Flow (S2F) Bitcoin price prediction system, BTC will reach $100,000 by December 2021.
There are, of course, the prospects of Bitcoin facing a reversal as well. Looking over the historical data, some analysts expect Bitcoin to fall by 50-60% in Q2 or Q3.
Apart from price predictions, Bitcoin mining will get even more demanding. The requirement for computing power and energy consumption while mining will only grow, and the rewards will only diminish.
In 2021, the Bitcoin hash rate has passed over 150M TH/s, and according to the Cambridge Bitcoin Electricity Consumption Index, the mining industry’s estimated energy consumption grew to 109.29 TWh/year.
Thus, the Bitcoin mining industry has reached a greater energy consumption level than the Netherlands’ (108.80 TWh/year).
Originally, it was intended to be a peer-to-peer decentralized currency to provide better security, stability, and usability. But for now, Bitcoin is still closer to a digital asset that’s more and more compared to Gold.
Even with the events of 2020, Bitcoin is still quite far from replacing the Fiat money and centralized currencies, but its image as a store of value will continue to grow. Countries facing economic difficulties, like Argentina, Paraguay, and Venezuela, are already seeing Bitcoin as an alternative to their own weaker and more volatile currencies.
As a matter of fact, in February 2019, Argentina and Paraguay have reportedly settled an export deal using Bitcoin. The Government of Argentina initiated the Simple Export project to facilitate the exports of goods and services at $15,000 or less. Thanks to it, Paraguay was able to buy fumigation and pesticide products worth $7,100 from a supplier in Argentina and used Bitcoin to settle the transaction.
As a payment system, Bitcoin is rather slow, being able to process only 10 transactions per second. On the other hand, its decentralized electronic payment systems counterparts (like Visa) can process over 20,000 transactions per second. Considered to be still in its infancy and being compared with the evolution of the internet, Bitcoin is expected to exponentially improve its speed.
Yet, however slow we may perceive Bitcoin to be, we do have to admit that waiting 10-20 minutes for a Bitcoin transaction is still faster than waiting for two banks to transfer funds between them.
But even if Bitcoin won’t replace the fiat, BTC is becoming more accessible to the general public through platforms such as Revolut, PayPal, and Robinhood. And with influencer-billionaire such as Elon Musk supporting it, Bitcoin may already be considered mainstream.
3. What is the future of cryptocurrency?
More and more countries continue to prepare and adopt cryptocurrency regulations. That will serve as proof of recognition and perception of a legit asset to invest in.
While we are still quite far from seeing homogenous legislation regarding Cryptocurrency, mainstream financial apps and trading platforms are integrating many other cryptocurrencies besides Bitcoin. That translates into more exposure of the general public to cryptocurrencies.
Retail traders are prone to experiment with cryptos while they are already on a trading platform. But what’s more interesting is that PayPal and Revolut users can easily buy into cryptocurrencies, even if they had never thought of it when they signed up.
The general public can easily get access to altcoins such as Ethereum (ETH), Ripple (XRP), Tezos (XTZ), Stellar (XLM), and 0x (ZRX), making it known that Cryptocurrency means more than Bitcoin. And the more the general public is exposed to the variety of the crypto space, the more transparent it will get.
Furthermore, besides PayPal, payment giant Visa Inc’s CEO Alfred Kelly has revealed the company’s plan to enable crypto trading on its network. That comes in the context where Visa is already enabling major cryptocurrency services providers such as Crypto.com and Coinbase to issue Visa cards.
SIDENOTE: For more details on the technology backing cryptocurrencies, take a look over our previous article on how does blockchain work.
Is Facebook’s Libra still a thing?
The answer is yes and no.
Facebook’s cryptocurrency initiative, Libra, was expected to go live in 2020. However, due to regulatory issues, the project did not see the light and some partners withdrew.
The project aimed to create an equally backed crypto coin and make it into the world’s most adopted digital currency. This way, the Libra would have provided the world with the technological means to bring more financial facilities to people in developing countries as well as to reduce taxation for abroad transactions.
Libra won’t come out but won’t stop either. On December 1, 2020, the Libra Association was renamed to Diem Association.
Libra faced a lot of regulatory pushback, so, by changing the name to Diem and envisioning a more limited approach, Facebook hopes to gain regulatory approval and launch the cryptocurrency on its own blockchain in 2021.
But as the crypto world’s landscape changed since they first announced Libra back in 2019, Diem will have to ‘fight’ its way up to success through a sea of innovative projects that get even more connected thanks to the Decentralized Finance progression.
Looking over the future of cryptocurrency and the future of Bitcoin, we can only see the crypto market expanding, even if most cryptos might go through a reversal. And that’s because not only increasingly more people are working on innovative crypto projects, but Bitcoin and the most popular altcoins are getting more and more recognition.
However, the fact that most crypto coins are gaining their value through their users won’t change any time soon. So this means the high volatility of the market isn’t going anywhere soon.
And while the most eager governments to support the cryptocurrency revolution are those from countries where the economic situation is difficult, the corporate world starts seeing opportunities in the crypto world as well. And that culminates with Elon Musk finally declaring himself a Bitcoin supporter.
As for Libra, even after it rebrands as Diem, it may still face some pullbacks due to the fact that governments were actually afraid of Facebook holding too much power. And nowadays, even if it manages to get past the regulators and deliver as high as promised, it may still have a tough time competing against established blockchain infrastructures and the DeFi capabilities that rose in 2020.