Where Is the Cryptocurrency Industry Headed in 2021?

crypto industry 2021

January 25, 2021

Reading Time: 4 minutes

The cryptocurrency Industry saw one of the best years in 2020. Digital currencies saw steady rises in their values owing to economic pressure due to the coronavirus pandemic. Companies and individuals alike invested heavily in cryptocurrencies in 2020 in a bid to curb the economic uncertainties prevalent with conventional currencies. Thus, digital currency seemed like a vital remedy for inflations experienced in 2020.

Now that 2021 is finally here with us, many crypto traders and investors could be contemplating where the cryptocurrency is headed in 2021? It is essential to take note of the investment experts’ crypto industry predictions in 2021. The resulting crypto industry predictions in 2021 will determine how the investors and crypto traders make their trades and investments. Also, the projections will help them determine the top crypto to invest in 2021.

Institutional Buying Expected to Continue

Long gone are the days when investors in crypto were merely individuals and retail crypto traders. More and more companies are joining the recently “woke” ones investing in cryptocurrencies, diversifying their investment portfolios in the process. 2020 was the worst year for most businesses, save for the big tech companies like Amazon, which amassed enormous profits even amidst the coronavirus pandemic.

The pandemic has affected most parts of our daily lives, so has the business aspect. Therefore, some big companies began investing in digital currencies in early 2020 to safeguard them from inflation. In doing so, they dodged the effects of inflation as their business did not shut down amidst the tough financial times.

The number of Institutional investors in crypto gained momentum, particularly bitcoin, which is our top pick crypto to invest in this year, towards the end of 2020. Some of the major companies which invested in cryptocurrency in 2020 are Barclays, Intel, Walmart, PayPal, and Square. Such cases form one of the top cryptocurrency trends in 2021 since bitcoin’s institutional investment is expected to continue in 2021. More and more companies are expected to join the bandwagon and add cryptocurrencies to their portfolios.

Bitcoin’s Predictions for 2021

Bitcoin was the first cryptocurrency to launch in the market in 2009. It was a valueless currency then but gained investor attraction and confidence year after year until it became a household name in investment matters. Bitcoin’s value reached $19,783.06 per coin in December 2017, after which its value declined to as low as $3,400 per coin, making crypto seem a very volatile investment. Most investment analysts at that time warned against investing in digital currencies due to this volatile nature.

In recent times, Bitcoin has seen a steady rise in its value in 2020, surpassing the $20,000 per coin mark on 16th December 2020. Contrary to the popular opinion that Bitcoin could see a fall in value after this rise, as experienced in 2017, Bitcoin’s value has only kept rising higher and higher. Bitcoin’s value reached a new all-time high on 3rd January 2021, its value skyrocketing to just above $34,000 per coin. Well, this rise is not entirely as much a surprise as it may seem since industry experts had expected surges to happen in 2021.

What are Bitcoin’s predictions for 2021? Numerous industry experts and respected investors have confidently and publicly made their Bitcoin’s predictions for 2021. Some of them are even confident that Bitcoin might reach the $100,000 mark in 2021. Others believe that Bitcoin’s value could even exceed $100,000. A senior analyst for Citi, as contained in a leaked report, believes that Bitcoin’s value could rise to as high as $318,000 by December 2021. However, much of the cryptocurrency predictions in 2021 are just speculations; industry experts are undoubtedly sure that Bitcoin’s value will be far greater than its value in December 2020. Thus, Bitcoin is a top cryptocurrency to buy this year.

Ethereum’s predictions in 2021

Bitcoin is not the only digital currency showing great potential in rewarding investors with high-profit margins by the end of 2021. Ethereum, like its “digital gold” counterpart discussed above, has gained a great deal of investor confidence. It is with no doubt that Ethereum is the second most sought after crypto after Bitcoin, and thus, it is essential to note some of Ethereum’s predictions in 2021.

It is worth noting that Ethereum has had its highs and lows, just like Bitcoin and other cryptocurrencies. Ethereum’s value fell from $1,300 in early 2018 to $91 by December 2018. Ethereum’s value was nearly reaching $700 by December 2020. One may, therefore, argue that crypto is highly volatile. However, these coins retain their values during their bull run, reaping the investor’s high profits.

Ethereum’s infrastructure allows for DeFi activity. However, the Ethereum community has faced many problems with the DeFi system due to the network upgrades caused by uncertainty on scaling times and Eth2 dates. Resolving this issue in 2021 will likely lead to an upsurge in Ethereum adoption outside DeFi. Ethereum is a top cryptocurrency to invest in this year.

Other Top Cryptocurrency Trends in 2021

Mass adoption

2021 will be the year of mass adoption of cryptocurrency as an alternative to conventional banking or trading. More and more companies and investment banks are adding cryptocurrency to their investment portfolios. Banks and other financial institutions, which previously shunned crypto will be “forced” to adopt them.

Many user-friendly tools, cryptosystems, and platforms will emerge in 2021. A new wave of newbies will join the crypto industry; as a result, marking the beginning of mass adoption of crypto.

DeFi

DeFi refers to Decentralized Finance. This sector of crypto underwent the most change in 2020 owing to the DeFi applications use. DeFi allows more control by the investors and crypto traders and thus, provides a lot of avenues to generate income. Some of these avenues are decentralized lending, mutual funds, exchanges, insurances, amongst others.

DeFi will inevitably face the pressure to combine traditional and decentralized finance in 2021, initially affecting DeFi and the entire crypto industry negatively. However, compliance after some time will restore the industry to its desired state.

Conclusion

The crypto industry is expected to undergo various changes that will most likely affect the industry positively. Bitcoin’s value will rise due to increased institutional investment in the digital coin. Ethereum will also see a rise in its value as more and more people will be opting to go for other digital currencies other than bitcoin.

The solidification of DeFi will increase trading and investment in crypto in 2021 since the investor will have complete control over their trades and investments. Also, many individuals, investment banks, and companies will join the industry for the first time, resulting in the mass adoption of crypto.

The crypto industry predictions in 2021 discussed in this article are not final since trends change with time. A trader or an investor must get regular updates on what is going on in the industry. That is where we come in handy with our up-to-date blog posts and news, which sufficiently informs the trader/ investor, the direction that the crypto industry is taking. Our team mycryptoparadise crypto analyst provides traders and investors with accurate trading Binance and BitMex signals to carry out highly profitable trades.

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