Dec 31, 2020

Two Things To Watch In Crypto In 2021

Cryptocurrency has been on a bullish run since March 2020 and is an exciting a market as ever. What are the key things to watch for in 2021 that will determine the outlook for the market?

1. When will cryptocurrencies other than Bitcoin become a recognized asset?

The year-end Bitcoin rise has been distinctly different from 2017 - not driven by small retail investors, but funds and corporations. Bitcoin has been recognized as a serious asset and a key portfolio diversification component in uncertain economic times. There is no popular market mania today - see below how "Bitcoin" was trending on Google in 2017 as compared to now. Will other cryptocurrencies, e.g. Ethereum, be also recognized as a portfolio asset for major players in 2021? This would mean a strong and stable growth impulse for the currencies involved.

 

2. Regulation is coming

A signficant amount of countries is planning to introduce crypto regulation in 2021. This can have serious implications, as the SEC suit against Ripple and its subsequent value loss have shown. Especially the more centralized cryptocurrencies might be forced to answer some questions this coming year. Then again, with key market players becoming bigger and bigger, the market might use more transparency. Look at Polkadot's growth after Binance's recent endorsement. While it was great news for Polkadot holders, one can wonder if exchanges should be setting up funds to support cryptocurrencies traded on them.

What are your key crypto topics to watch for in 2021?