Today, cryptocurrencies extend beyond Bitcoin (CCC: BTC-USD). Litecoin (CCC: LTC-USD) and Ethereum (CCC: ETH-USD) are both CCC-certified coins (CCC: LTC-USD). Other digital assets, such as new digital currencies and tokens, are gaining popularity in their portfolios. Indeed, as digital assets gain widespread usage, the cryptocurrency sector as a whole is developing and growing. Beyond the periphery, an increasing percentage of investors already own some cryptocurrency. You can visit the official websites of cryptocurrency for Bitcoin trading app. In this post, you will get to know about the complete cryptocurrency guide.
Rally of Cryptocurrencies
Cryptocurrency’s Bull Run in 2020 was substantially different from the one in 2017. While individual investors and whales primarily drove the last bubble, the 2020 boom is caused by an institutional interest in digital currencies. This gives us hope that cryptocurrencies will eventually receive the public acceptance they have deserved for so long, resulting in widespread adoption.
Cryptocurrencies, but the blockchain technology, in general, exploded in popularity in 2020, with various businesses expressing interest in incorporating the technology into their business operations and processes. This is due primarily to the Covid-19 virus outbreak, which accelerated the worldwide digital revolution. As a result, the global blockchain industry is expected to rise from $4 billion in 2020 to $39.7 billion in 2025, growing at a compound annual growth rate of 67.3 per cent during the five years. With this level of enthusiasm in the cryptocurrency market, 2021 is projected to be another great year.
Central Bank Digital Currency
Institutions have a vested interest in a broader range of issues than CBDCs. However, one of the key factors fueling interest in cryptocurrencies in 2021, in my opinion, will be the development of CBCD initiatives. Thus, according to the latest BIS report, 80 per cent of all central banks assess the advantages and disadvantages of CBDCs.
They have already completed countless trials with businesses and individuals and are on the verge of expanding globally. Additionally, the ECB is planning to decide by mid-2021 on the Digital Euro plan. As a result, the race has begun. Moreover, these initiatives are likely to accelerate in 2021, owing to the increasing digitisation of economies globally, the decline in the use of physical cash, and the ease of cross-border transactions, all of which benefit globalisation when the majority of economies are seeking ways to accelerate recovery.
What Issues Might Affect The Cryptocurrency Sector In 2021?
These initiatives have successfully developed the financial sector’s use cases for cryptocurrency. Indeed, I am confident that Defi’s success will significantly determine whether digital asset storage or tokenisation is accepted. DeFi trials have established that smart contracts are viable in various contexts, not just financial services. They are almost destined to be the next big thing in the entire financial industry.
DeFi began 2020 with $683.35 million in locked assets and concluded the year with well over $14 billion, gaining more than 2,000 per cent. This is also positive news for Ethereum, which serves as the foundation for most DeFi protocols. As a result, a DeFi boom may boost investor interest in ETH.
Cryptocurrency Exchange-Traded Fund
Crypto enthusiasts have long desired a Bitcoin Exchange Traded Fund (ETF) on a par with the ETFs available to institutional investors. On the other hand, VanEck has been adamant in pursuing SEC approval for its Bitcoin ETF offerings. If crypto ETFs are allowed, they have the potential to bring a significant number of investors into the cryptocurrency world who are ready to participate but are unwilling to take on the risk of buying and selling coins directly on exchanges.
For these traders, Contracts for Difference (CFDs) have emerged as the favoured instrument. Indeed, CFDs have witnessed a dramatic surge in popularity, not just for bitcoin trading but also for participation in the forex and equities markets.
Will Bitcoin Remain Stable and Expand?
Bitcoin has had a fantastic run, at least until the second part of 2020. BTC’s Bull Run has continued into 2021, as the cryptocurrency surpassed $40,000 in early January and has not fallen below that level since. PayPal and Square now support Bitcoin as a payment mechanism, allowing users to make bitcoin payments. Additionally, in December 2020, MassMutual, prominent insurance, purchased $100 million worth of Bitcoin.
Once it is confirmed that financial titans are amassing digital currencies, it instils trust in retail traders to participate in the crypto market. As a result, Bitcoin outperformed practically all other asset classes, with some experts making somewhat ridiculous estimates for its 2021 price target. For instance, a Citigroup analyst estimated that BTC might be worth $318,000 by year’s end, while Guggenheim experts thought it might be worth $400,000.