It’s that time of year again, so let’s take a look at some cryptocurrency and blockchain predictions for 2021.
This past year has been a tumultuous one to put it mildly, but against that backdrop the blockchain and cryptocurrency sectors continued to advance, develop, and grow. Whether it took the form of increased regulatory attention and clarification, wider adoption of bitcoin and other cryptocurrencies as a medium of exchange, or the broader utilization of blockchain across different organizations, the trend is clear.
Blockchain and cryptocurrencies have moved, by any metric, far from the earlier days of conceptual understanding and technical curiosity, and have now become part of the mainstream business conversation. That said, there is still a large amount of uncertainty that remains in the economy and blockchain sector at large; this continued uncertainty also creates a dynamic marketplace. Making forecasts about the future is always a tricky endeavor, and doubly so for such a fast moving and evolving sector.
That said, let’s take a look at 5 predictions for the blockchain and cryptoasset space for 2021, although some of these developments may take longer.
Bitcoin will close 2021 above $30,000. This might seem like a conservative prediction, especially given the runup that has occurred at the end of 2020, but prices do not go up forever. Given the institutional fund flows and interest, however, it does seem that these recent price trends have support.
Stablecoins will lead the way. Despite the continued conversation and focus on bitcoin prices and trading volume, stablecoins are rapidly becoming a leading entry point for wider adoption. With a market capitalization in the tens of billions, and serving as a bridge for incumbent payment processors, the wider utilization of stablecoins seems a prediction that makes reasonable business sense.
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Central bank digital currencies (CBDCs) will launch. The rise of CBDCs is all but assured, and the only remaining question is the exact timing of this launch. With efforts underway across the globe, the only unresolved item is which nation will deploy a CBDC first. Alongside these implementations, however, will be renewed concerns around privacy and security; exciting times for sure.
Tax enforcement will escalate. The Internal Revenue Service (IRS) has made several moves in the last year or so that indicate the seriousness with which crypto tax enforcement will be handled moving forward. Taxes, however, are not a U.S. only issue, and with the runup in cryptocurrency prices in 2020, expect that tax authorities the globe over will take a fresh look at this potential revenue.
Blockchain will expand beyond financial services. This may come as something as a surprise to the individuals and organizations that operate in the blockchain and cryptoasset space, but the (much) larger non-expert population still commonly associates blockchain as meaning bitcoin. 2021 is shaping up to be the year that, across the board, blockchain moves into the mainstream and a much wider range of economic sectors. Healthcare, transportation, and logistics are just a few of the areas that may benefit from wider blockchain adoption and implementation.
Predicting the future is always risky business, because there is simply no way to know what is coming around the corner. That said, based on the trends that have been building – and have even accelerated – during 2020, it does look like 2021 will continue the breakout trends for cryptoassets and blockchain technology.
Next year is shaping up to be an exciting and dynamic year for the blockchain and cryptoasset space, and the future seems bright for continued growth and implementation.