What Does 2021 Hold for Bitcoin?
It is fair to say that 2020 has been an unpredictable and unprecedented kind of year. Covid-19 came as a shock to the masses, turning entire industries and communities on their heads as governments started to restrict movement and put countries into lockdowns and quarantines. With so much uncertainty, predicting trends for 2021 is tricky, but some major activities in the cryptocurrency world point to shifts in the industry for the months ahead.
A Possible Bitcoin Miners Strike
As of April 2020, there were more than 5000 cryptocurrencies in existence. With the top number one and number two spots in the market remaining in the firm grip of Bitcoin and Ethereum respectively. These two juggernauts of the industry have consistently held these top spots with no other currency getting a look in for a long time.
However, a major change for Bitcoin could see it’s popularity start to decline in 2021 - that change was the Bitcoin halving. There's a Bitcoin halving every four years, and the most recent one happened in May 2020. The previous two halvings created a soar in Bitcoin’s value. What is different in 2021 is that the rewards for Bitcoin Miners are so low (6.25 BTC per block mined) that many Miners may move on to other currencies where the rewards are higher. After all, we are seemingly headed into a recession. It makes sense that Miners would want to make as much profit as possible before the economy goes into major turmoil.
Regulation For The Cryptocurrency Industry
It is more than ten years since Bitcoin was first introduced to the world by its mystery creator Satoshi Nakamoto. In the years that have passed more and more currencies have come about and more and more people have bought in as Bitcoin’s popularity proved that cryptocurrency was more than a passing fad. Despite the apparent potential and popularity of cryptocurrency during that period, surprisingly, there are minimal legal or regulatory frameworks. Unlike traditional currency, there is no central bank that currently regulates cryptocurrency.
With the shock to the global economy that Covid-19 caused, traditional financers, lenders and banks are predictably tightening their rules and ramping up compliance. Bitcoin and the entire cryptocurrency industry can expect tight regulations to be prioritised to come into play in 2021 too.
Possible Job Creation
Given the expected regulation increase, 2021 could see an increase in jobs in the RegTech (regulatory technology) sector. Great news for many who have found themselves out of work during the pandemic. Fintech and regulation are two strong areas that I believe will create jobs in the first half of 2021. For anyone looking for a career pivot, this is definitely an option if finance and technology are your strengths. Plus they have remote working options.
This may be an opportune moment to upskill and remarket yourselves as RegTech professionals. There are multiple offerings for free and subsidised professional training courses available online currently. Focus on areas like big data, business law, and financial reporting for enhancing your RegTech skills.
Two notable changes and influencers for the future of Bitcoin and the crypto economy are non-traditional players’ interest in the market. One that has already dipped its toe into the crypto-water is Facebook with Libra. The other is the US Government, rumoured to be investigating its digital currency options.
For Bitcoin, this will mean major competition. Organisations and governments of this size bring security. People and investors flock to security like moths to a light.
The invested interest being shown by major organisations could play out in one of two ways. It could mean that Bitcoin becomes more valuable as more people become interested in digital currency and braver with investing in it. In this scenario, the likes of Facebook play the equivalent role of an Instagram Influencer. Giving their trusted stamp of approval to cryptocurrency and showing their huge following just how easy it is to buy it and use it.
Alternatively, those who are already invested in Bitcoin and future potential buyers of BTC could decide to move to currencies that have the backing of brands they understand.
What is definite for Bitcoin in 2021 is change. For better or worse, there is a major shift coming.
About the author:
Katherine Rundell is an investment consultant and finance writer at Write My Research Paper and Do My Assignment. She is involved in local business growth groups and plays the piano in her spare time. Also, she is a blogger at Essay Roo service.
The above references an opinion and is for informational purposes only. Do not take this as
personalised financial advice or investment advice. The views expressed by the author do not
necessarily represent the opinion of BitPrime.
Last updated: 05/02/2020