Bitcoin’s record growth, the boom in the decentralized finance industry, the launch of Ethereum 2.0, the closure of the TON project, enterprise blockchains, and the development of DEX — what 2020 will be remembered for the cryptocurrency community. And now, at the end of December, the most pressing question is: what to expect from the cryptocurrency industry in 2021, and how to prepare for the changes? In today’s article, I will look at the main trends of this year, which will continue and intensify over the next 12 months.
Despite the many positive and negative things that have been happening in the crypto industry over the past time, the loudest news was Bitcoin’s record rise, as a result of which the price of the coin climbed to $24,000, setting a new all-time high. Note that public interest in Bitcoin is now several times lower than in 2017, when the previous record for the price of BTC was set. And the reasons for large investments in the cryptocurrency market have changed significantly now.
As I have said many times, institutional investors are the main growth driver of the first cryptocurrency. Corporations, foundations, millionaires – they are all starting to transfer some of their funds to Bitcoin. This is primarily due to the economic instability that has worsened over the past year. Inflation of fiat currencies, depletion of reserve funds, and the predicament for small businesses will surely hit the economies of countries and the well-being of citizens.
This pushes investors to look for new assets. Gold is the classic “savings” asset, and now Bitcoin – digital gold – stands next to it. The interest of large capital in cryptocurrencies was the main reason for the rise in the value of BTC. Of course, manipulations with the emission of fiat currencies and the depletion of reserves will not pass without consequences, therefore, we can expect a continuation of the transition of large capital to the digital space.
In addition to Bitcoin, attention will be paid to other cryptocurrencies. The recent launch of Ethereum 2.0, which has completely switched to a staking system, has shown a lot of community interest in this technology. Opportunities, which have been tested by dozens of Defi projects this summer, are now partly represented in the authoritative and well-known project by Vitalik Buterin’s team. I am confident that staking on Ethereum 2.0 will attract a significant amount of investment and ensure the growth of the network. This provides excellent tools for developers of blockchain startups who prefer the Ethereum blockchain the most.
Enough attention is paid to other cryptocurrencies as well. Despite the widespread belief that large investors view the cryptocurrency market as “Bitcoin and everything else,” this is only partially true. In fact, the crypto market is already mature enough to trust blockchain projects much more than in 2016-2017. A lot of investors are interested in promising altcoins, and even more – in alternative forks of bitcoin, which became the main star of 2020. I can say this since I am the CTO of the large Prof-it Blockchain team that is working on the creation of Bitcoin Ultimatum.
The functionality of Bitcoin Ultimatum provides for work with smart contracts, anonymous transactions and high bandwidth, thanks to the development of its own consensus protocol – UPoS. We have successfully worked on solving scalability, speed and anonymity issues in the bitcoin blockchain. And besides that, we have implemented atomic swaps and abandoned energy-intensive mining. Together with the team, we created a market regulation mechanism for BTCU that protects the coin from strong fluctuations during market volatility.
Our project attracts great interest among the crypto community, which can be determined by the amount of information published in the media and by the number of conferences wishing to see Prof-it Blockchain as speakers.
But this is only part of the puzzle behind which the main thing is hidden – corporations and businesses began to pay attention to cryptocurrencies. This did not pass by the governments of many countries. Having appreciated the advantages of digital assets, China, India, the USA, Russia, Japan, and dozens of other states have begun to actively develop their own digital currencies. China and Italy have already started testing. There is a high probability that in 2021-2022 we will see the launch of the first cryptocurrencies from state banks.
In fact, that global crypto adoption that has been talked about for the past 5 years has already begun. It was a little different from what many imagined. We have not seen a move away from fiat in favor of crypto. However, digital currencies are being created already at the state level, and decentralized finance can reform the entire traditional system in the near future. Yes, this is happening in smooth small steps, but we are gradually moving towards the full adoption of blockchain technologies by modern society at all levels.