Expert Analysis on Crypto Price Prediction In 2021: Will Bitcoin and Ethereum Grows Along with Other Cryptocurrencies?
Experts say cryptocurrency adoption will increase further in 2021. To date, Bitcoin (BTC) and other crypto assets have had a very good 2020. With the global economy expected to continue to deteriorate in 2021, crypto could gain additional followers as it promises greater returns and independence from traditional finances.
How accurate were the forecasts for 2020?
Industry players were entirely accurate when they shared their predictions in 2020.
They predicted that Bitcoin’s halving in May would increase demand for the Bitcoin cryptocurrency. This was generally the case, with Bitcoin’s price surging from a low of $ 5,000 to $ 9,000 before May 11 and beyond rose steadily, reaching as much as $ 14,000 on some exchanges on October 31, 2020.
Experts also suggested the Defi’s growth from a total value of $ 678 million on January 1, 2020. The sector has grown to $ 10 billion at the time of writing.
Central bank digital currencies (CBDC) were another thing they said, “Those will take hold as an idea.” This was mostly true, too. The People’s Bank of China completed a digital yuan trial in October. Other banks such as the European Central Bank and US Federal Reserve are exploring their alternatives, while Cambodia and the Bahamas have already launched their CBDCs.
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2021: More BTC adoption, more stable coin acceptance
The first forecast for 2021 is that we will continue BTC’s upward move in 2021.
Bitcoin will still be the main focus. Institutional demand for Bitcoin is increasing this year and will continue to grow next year,” predicted Bendik Schei, Head of Research at Arcane Crypto.
Schei suggested that bitcoin adoption next year will be facilitated by the “massive development in the infrastructure for BTC,” which has improved the cryptocurrency’s accessibility for institutional investors.
“Now, the data also shows that the institutions are coming. In 2020 we have seen new records and strong growth in CME and Bakkt, massive influx for Grayscale and public companies with buying bitcoin as a reserve.”
Most other figures and industry commentators agree with this analysis. Nick Cote, the Senior Analyst at crypto trading platform Hxro Labs, is one of them.
“Bitcoin will gain significantly in 2021 due to further institutionalizing the space as more custodial services and insurance offerings become available. Adoption may be reflected not only by rising prices but also by the number of unique wallet addresses, the total dollar value traded on-chain, and the continued global penetration of the Bitcoin brand, which continues to benefit from its first-mover advantage,” He said
Related to Bitcoin’s use as a hedge against inflation will be the parallel growth of stable coins such as Tether, which serve to provide liquidity in crypto markets.
“The use of stable coins is especially high in East Asia, accounting for 33% of all value traded in the cryptocurrencies in the region. That share has risen steadily this year, beating BTC as the most received cryptocurrency,” said Kim Grauer, the Head of Research at Chainalysis.
Grauer added that Chainalysis expects stable coins to continue to grow in popularity worldwide, “especially in regions where they provide a stable store of value and are effective in executing daily trades.”
Ethereum and Defi
Defi has witnessed spectacular growth this year, which in turn has boosted Ethereum (ETH) and cemented its position as the number two crypto asset. This could continue next year, especially as low-interest rates are driving investors to Defi.
“Ethereum is also positioned to see greater adoption,” said Jason Wu, the CEO, and co-founder of Defi Network DeFiner.
“First, it is the network around which the vast majority of Defi activity revolves. There are also huge numbers of transactions, and these transactions largely operate on the Ethereum network.”
Expert also suggested that 2021 will witness the emergence of ERC-20-based non-replaceable tokens (NFT), which will see “a continuous increase in the arts, creative and ultimately financial services.”
As the major platforms and broader ecosystem will see more use in 2021, we can also see more platforms that enable interoperability and communication with external data sources.
“Chainlink will enjoy the most adoption in 2021. The underlying technology solves real-world problems and brings crypto closer to mass adoption,” said Luciano Nonni’s, the CEO and co-founder of the trading/research platform.
Chainlink (LINK) provides a framework for building decentralized oracle networks so that smart contracts can access data input and output in the non-crypto world. Nonni’s added that it would “bridge the gap between blockchain and industry.”
Aside from predicting NEM (XEM) growth and its Symbol platform, Dave Hodgson, NEM Group’s Chief Investment Officer, agreed that interoperability blockchains would be busy by 2021.
“Other key players including Cosmos, Cardano and Polkadot aim to support different use cases, making it easy to migrate from Ethereum while supporting similar types of contracts, which can be beneficial when Ethereum is faced with similar scalability, Cost challenges,” he said
Obstacles In Crypto Adoptions
Recognizing that Bitcoin was designed to answer an economic crisis and the world is facing new economic headwinds, 2021 could be another good year for crypto adoption. However, we shouldn’t get too ahead of the curve as crypto also faces several hurdles to overcome to maximize adoption.
“I think BTC as a means of payment needs improvement on the [user experience] side,” said Bendik Schei. “Lightning Network will be important in the coming years to enable instant payments and enable innovation in various industries, but it is still in its infancy.”
Likewise, Ethereum also has some of its teething problems to overcome, at least according to Dave Hodgson.
“Ethereum is a project to watch, but seems to be suffering from project fatigue, and more and more people are speaking to other chains because of, I suspect, uncertainty about Ethereum 2.0 dates and scalable timescales.”
We can say at least one thing about 2021, if it is even half as eventful as this year, it should be an exciting year for cryptocurrency adoption.
Finally experts also suggested that cryptocurrency ownership could accelerate in the coming years, mostly if regional and global recessions occur.
As reported, the use of cryptocurrencies is growing exponentially, according to researchers at the Cambridge Center for Alternative Finance, more than 100 million people worldwide now using crypto assets.
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