Bitcoin (BTC) and Co. started the new year with enormous price fluctuations. Which topics could cause even more volatility in the crypto market in 2021?
Bitcoin and many other cryptocurrencies outperformed all other asset classes in 2020. BTC had a three-digit return last year and with a price increase of 303 percent, was able to leave all major asset classes far behind.
Since the Corona crash in March, the Bitcoin rate has increased by more than 450 percent thanks to institutional adaptation and the global expansionary monetary policy of the central banks. Below are four of the most important topics for Bitcoin and the entire crypto space in 2021.
2021 could be the year of mainstream adaptation of cryptocurrencies. PayPal wants to give 346 million people access to digital currencies this year. In addition, it should soon be possible to pay with cryptocurrencies at over 26 million merchants worldwide.
In the USA, it is already possible to purchase cryptocurrencies via PayPal, and further, selected markets are to be added in the first half of 2021.
In addition, it can be assumed that more and more companies and institutions will jump on the Bitcoin bandwagon. According to Square and MicroStrategy, it is, therefore, quite possible that even more companies will come out as Bitcoin hodlers in the coming months.
But that’s not all — Decentralized Finance (DeFi) could also achieve a breakthrough this year.
Just last week the DeFi project Chainlink (LINK) and the PayPal partner Paxos announced a cooperation.
Paxos wants to use Chainlink’s oracle network to, among other things, promote the adaptation of the Stable Coin Paxos Standard (PAX) in the DeFi sector. Additionally, a press release released by Paxos suggests that further expansion into the DeFi sector is imminent in the next few months. It is therefore conceivable that in the future, in addition to Bitcoin and other cryptocurrencies, DeFi applications will also be integrated at Paxos customers such as PayPal or Revolut.
In addition, the travel app Maps.me, which has over 140 million customers worldwide, announced that it would like to integrate DeFi applications into the app. The company has already raised $ 50 million from investors.
Maps.me’s co-founder Alex Grebnev stated that his company has long-term plans to integrate a wide range of financial services into the app. In addition, Maps.me is to receive a native crypto wallet. This is also extremely positive news for Bitcoin, as there is a high probability that digital gold could also gain access to the DeFi sector via the app integrations.
Currently, there are still a few listed companies through which investors can invest in the crypto industry. That could change drastically this year.
The Bitcoin exchange Coinbase wants to go public this year. As a result, the San Francisco-based company filed an application to go public just a few weeks ago. With 35 million users in more than 100 countries, Coinbase is one of the pillars of the crypto industry.
A successful IPO on the Bitcoin exchange could bring mainstream recognition to the crypto space. In addition, it is quite possible that other crypto companies such as eToro, ConsenSys or BlockFi will go public this year.
Many expect the Joe Biden White House to put a new focus on regulating cryptocurrencies. In the USA, in particular, there is a lack of regulatory clarity compared to countries such as Switzerland, Great Britain, Singapore, or Japan. Therefore, many companies that have to do with Bitcoin and Co. are currently in a limbo.
Cryptocurrencies continue to penetrate the mainstream. Therefore, both the USA and other G20 countries have no other choice and must create a clear framework for the new asset class. The new nominated SEC Chairman Gary Gensler plays a crucial role in this.
The former chairman of the US Commodity Futures Trading Commission (CFTC) is a bitcoin and blockchain expert. Gensler has already given lectures on blockchain and cryptocurrencies at the world-famous US elite university of the Massachusetts Institute of Technology (MIT). Some of his lectures can still be seen here .
The formal swearing-in will have to wait until Gensler is confirmed by the Senate. But after the runoff elections in Georgia in January secured the Democrats a majority in the Senate, nothing should stand in the way of the new SEC chairman being sworn in.
This year, therefore, it is likely that the US will introduce one of the most advanced crypto laws in the world. Biden has already put a controversial crypto law on hold as one of his first acts . Overall, the developments in the USA could have an enormously positive impact on the entire sector.
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