10 Best Predictions for Bitcoin: Crypto Trends in 2021
|Predictions and forecast for Bitcoin in 2021. Photo: Youtube|
1. BTC will add zeros
Bloomberg Intelligence’s Mike McGlone is another who is upbeat about Bitcoin’s prospects in 2021. He argues that $50,000 is “a good 2021 target resistance” — a milestone that would result in an overall market cap of $1 trillion. But perhaps his most significant prediction relates to what would happen in the event of a market crash. McGlone argues that $10,000 now serves as critical support for Bitcoin — a remarkable achievement given how the cryptocurrency spent most of 2020 trying to break through this zone.
2. Expect Bitcoin to be used more often as a store of value
While other digital currencies such as Bitcoin Cash, Litecoin, and Bitcoin SV (BSV) allow investors to diversify their investment portfolios, these assets have not proven to be legitimate alternatives or options when it comes to serving as a reliable long-term store-of-value (SoV). Only BTC, which has the world’s largest and most secure crypto network, and potentially Ethereum (ETH) now to some extent, have shown that they’re able to hold value and even appreciate in value dramatically over longer periods of time, CrowdFund Insider cites.
According to well-known investor Raoul Paul, there’s no other asset besides Bitcoin (and Ethereum to a certain extent) that can potentially deliver 10x or higher returns within a span of a few years. Paul, who now holds the majority of his net worth in Bitcoin and Ethereum, believes that these assets provide an excellent risk-to-return ratio.
3. Cryptocurrency will get taxing
If you own Bitcoin, now might also be the time to get your tax affairs in order — especially if you live in the U.S. or the U.K. The Internal Revenue Service, as well as Her Majesty’s Revenue and Customs, are beginning to step up action against those who fail to declare their crypto holdings. Selling Bitcoin for more than you bought it for is a taxable event, meaning you’ll be liable to pay capital gains, as cited by Coin Market Cap.
4. The vaccine won’t make much impact on the crypto market as long as the institutional investors’ demand for Bitcoin is high.
The vaccine won’t be able to stop the bull run, even though it promises we’ll get back to the pre-crisis environment. If mass vaccination started in the nearest few months, it would positively impact the stock market in the first place.
Much liquidity will shift back, yet Bitcoin will still be used as a risk diversification asset. The price will soar on the same level as it has been before vaccination. If mass vaccination against COVID-19 isn’t proved effective or affordable to people worldwide, the economy will continue to struggle through the 2021st.
It means that most investors will continue using Bitcoin as an inflation hedge. Money from the stock market will be poured into gold and Bitcoin. And as Bitcoin keeps maturing, attracting more and more institutional investors, the odds are it will outperform gold sooner than we expect.
Both scenarios make a positive impact on the price of crypto in general. The demand for Bitcoin will increase, and as the supply has been cut in two this May, the price will skyrocket even more.
Besides, the tremendous spike in interest of institutional investors has become the trend of 2020 that will keep propelling the price through 2021st, Hacker Noon cites.
5. Bitcoin will be acknowledged as an international payment currency.
As I have already mentioned, the biggest debit payment system PayPal has joined the crypto market, allowing its users to hold, buy, and sell digital currencies in its online wallets. The press release also states that beginning in 2021, Paypal customers will be able to use their crypto to pay at PayPal's 26 million merchants worldwide with no incremental fees.
To address high volatility, the consumers will immediately be converting their crypto balance to fiat. With a PayPal user base of 340 million, we can assure you that mass adoption is finally here.
6. Regulation will come into sharp focus
Moving away from prices for a moment, do remember that central banks and governments will be looking at Bitcoin’s surging market cap very closely. As JPMorgan CEO Jamie Dimon recently noted, the U.S. could be tempted to spring into action and introduce new curbs on BTC if the cryptocurrency gets any bigger. And that’s before we’ve even contemplated the possibility that altcoins could become a more attractive place for growth than BTC, or central banks launching their own digital currencies as the space becomes competitive.
7. Bitcoin will serve as a hedge against inflation and will take up the gold’s market share
|Photo: Bitcoin News|
JPMorgan Chase’s report shows that institutional investors consider Bitcoin a digital alternative to gold, which has long been a traditional hedge asset. In October, investment inflow in Grayscale Bitcoin Trust (GBTC) has increased exponentially, whereas investment in gold ETF has remained almost unchanged.
Moreover, now we see a massive inflow into crypto out of gold, and this trend will continue throughout 2021st, according to JPMorgan Chase & Co’s prediction.
They also say that the rise of the cryptocurrency market will come at the expense of gold. It sounds natural, given that Bitcoin is a more technologically advanced inflation hedge, while fiat will continue to suffer from the pandemic’s consequences.
8. BTC will double again
After falling into the trap of making several inaccurate BTC price predictions over the years, Galaxy Digital’s Mike Novogratz had said he would “hang his spurs” if Bitcoin failed to hit $20,000 in 2020. Against the odds, he was proven right… so what does he think will happen in 2021? In tweets to the Game Of Thrones actress Maisie Williams, he asserted that $65,000 is a realistic price target for the coming year. It’ll be interesting to find out whether he’s right.
9. A big pullback is possible
According to a survey performed by Finder.com, there’s a lot of disagreement when it comes to whether we’re going to see a market crash in 2021. Respondents were split right down the middle, with 52% warning that we could see BTC lose more than half of its value in a short space of time. Entrepreneur Jimmy Song was quoted as saying: “This has happened in 2017, 2013 (twice), and 2011. I don’t see why it would change this time around.”
10. BTC will carry on threatening gold
One source of lively debate in 2020 centered on whether Bitcoin can continue to steal market share away from gold. Some analysts believe that the precious metal’s days as a store of value are numbered because of how millennials prefer cryptocurrencies as a safe haven asset. Indeed, Tyler and Cameron Winklevoss have repeatedly set out the case for BTC hitting $500,000. Although that might not happen in 2021, the twins are adamant that this milestone will be achievable one day.
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