3 Bitcoin Predictions for 2021
This year has undoubtedly been a difficult one for investors with all major markets experiencing extreme volatility. However, there was a silver lining for those invested in bitcoin. The world’s most valuable virtual currency has been on an incredible bull run since March of this year, rising from $4,000 to reach an all-time high of $23,000. In light of this incredible growth, what does the future hold for Bitcoin in 2021?
Here are Global Fintech News predictions on what the new year will hold:
- Adoption Rate Will Increase
In previous years the rate at which people were using bitcoin in day to day life was meagre. This was mainly down to very few businesses or people accepting it as a form of payment. However, in 2020 this changed. Declining cash usage from COVID-19 combined with prominent fintech companies such as PayPal and Square, making it easier to use bitcoin, resulted in growing mainstream acceptance.
In 2021, we’re likely to see more widespread adoption. Whether it’s a major US or European bank, there’s a distinct possibility that some banks will announce a system will that will allow people to make purchases using bitcoin or even hold digital assets.
- Competition From Big Tech and Banks
The meteoric rise of bitcoin has certainly caught the attention of big-tech and banks.
This year, both Facebook and Google have announced they will both be introducing their own digital currencies. Although they won’t be precisely the same as bitcoin, they certainly have the potential to have an impact on bitcoin’s growth.
Banks also have plans to introduce their forms of digital currency. A Bank for International Settlements report indicated that 80% of the world’s central banks are working on some form of digital currency.
China is an example of a country that is further ahead than most when it comes to digital currencies. With the country launching various initiatives to encourage digital yuan adoption, the Chinese government will likely undercut demand for bitcoin and other independent cryptocurrencies. In 2021 we could also expect other countries to follow China’s steps and launch their digital currencies.
- New Tax Laws
Many countries still have poorly defined crypto tax taws, which is understandable given how new the industry is. However, as more and more people begin to profit from cryptocurrencies like bitcoin, the taxman will inevitably start wanting a piece of the action.
In 2021, we can expect tax authorities to start taking a further interest in cryptos and begin establishing how they should be taxed. Countries such as Switzerland and Malta have some of the best-defined crypto tax laws in Europe, and we can expect other countries to start developing similar tax laws to them.
Follow The Journey
Whether you’re a fan of Bitcoin or not, you’ll want to follow how the year unfolds for the digital currency. And here at Global Fintech News, we’ll keep you updated with every twist and turn of the drama.