There are many new digitiation tendencies that are going to appear and develop in 2021. Institutional investors are seriously seeking for safe haven in Bitcoin as well as other digital assets, and this could make digital currencies may hit new heights.
We have seen several trends of 2020 that have influenced the process of cryptocurrency adoption. The best event that has greatly changed the industry has been that of the coronavirus pandemic. The Covid-19 has pushed digital currency and blockchain tech forward.
Before the pandemic, BTC had hit a high of $13,438 on June 26, 2019. But when coronavirus arrived, its price has now grown to $23,147, and this figure has surpassed Bitcoin’s previous all-time high of $19,783 (1400% surge) that it recorded on December 17, 2017. The total market cap was at $386.4 billion on June 26 last year and it is now standing at $618.5 billion, and this shows a big growth.
Over 40% of the startups can boast of DLT pilots running. More DLT-based initiatives might move to the launch stage. It is believed that about 30% of initiatives worldwide evolve from pilot into production and will more likely be operating on DLT networks. Private DLTs will dominate the industry at large. Private blockchains deliver greater transparency, efficiency, security, privacy and are more reliable as compared to enterprise solutions.
More companies will be venturing into the creation of supply chain solutions using blockchain. Zero Knowledge Proof (ZKP) might appear to help in meeting the encounters that are at present holding DLT initiatives back. For the purposes of security, several companies will move from creating decentralized applications to creating ZApps.
A big number of blockchain initiatives are more likely going to pause due to the uncertainty caused by coronavirus. The pandemic will make it hard or not allow the governments to draft regulatory frameworks for such strategic schemes.
As CoinIdol, a world blockchain news outlet, reported in early 2020, over 46 central banks globally started discovering the potential of CBDC. It is therefore anticipated that many CBDC schemes will be launched in 2021. The US is going to issue its own CBDC dubbed digital dollar. Before launching these projects, governments will have to first make tight and effective regulations to properly govern the entire financial technology industry.
Since there has been a massive investment growth in virtual assets in 2020, criminals will take advantage of the weak cybersecurity to hack and steal user’s funds stored in their digital wallets. Hackers will also target major cryptocurrency exchanges.
Illegal activities associated with cryptoassets such as money laundering, scams, drug trading, fraud, crypto malwares, fake digital currency investment platforms, terrorism funding will also increase. Covid-9 will press hard companies towards the digital world hence digital transformation. Businesses will realize that the only way to survive is by going digital.
There shall be more online markets increase, more digital payments alternative being introduced, more digital identities being advocated, cross-border transactions conducted using cryptocurrencies will multiply since it is one way of fighting the pandemic. Most businesses will shift to another, more digitized, operation model.
The Coronavirus pandemic will further fast-track DLT transition, and the industry will have a variety of blockchain tech projects. Among these DLT projects, around 90 percent will need replacement within 12-months, and this is due to the fact that most of the blockchain projects are paying no attention to key features like smart contracts, distributed consensus and tokenization.
Some things like growing institutional adoption, increase in embryonic worldwide markets and growing developer activity all show that the increase of cryptocurrencies is presenting fundamental impact in 2021.
An economist at London School of Economics Garrick Hileman believes the market cap of Bitcoin could go up to $1 trillion in 2021 since its adoption is growing higher.
Other experts including Winklevoss twins predict BTC could skyrocket in value by about 25 times in the near future. Generally, the year 2021 will mark additional gains for the cryptocurrency scene in terms of financial and technical.