So far in 2021, Bitcoin has reached new highs, and the market has been booming. Regulators around the world are discussing frameworks that will impact the industry, while major corporations demonstrate institutional buy-in. What’s next?
- Bitcoin Will Grow
The dynamics of Bitcoin reflects the health of the crypto market overall. The pioneering cryptocurrency still has the biggest market cap, and the rest of the market generally follows its trends. Since the beginning of 2021, Bitcoin has had a wild ride. In April, it peaked at $60,000. Subsequently, it plunged to $30,000 and climbed back to around $50,000.
This extreme volatility is a deterrent for investors who know they should not keep more than 5% of their portfolios in BTC. At the same time, traders can capitalize from the short-term jumps. But how high can the coin rise by the end of 2021?
Kiana Danial, author of “Cryptocurrency Investing for Dummies” suggests that Bitcoin’s dynamics since 2011 show a growth in the long term despite volatility in the short term. This conclusion may be drawn from its multiple spikes and pullbacks.
Some other experts are more optimistic about Bitcoin’s short-term potential. For example, Bill Noble, Chief Technical Analyst at TokenMetrics, expects the price to continue rising to around $75,000 and views decline as an unlikely scenario.
- Institutions Will Continue Embracing Crypto
Companies across industries are adopting cryptocurrency payments. For example, Starbucks, Microsoft, and AT&T let users pay for their services with Bitcoin. PayPal and Square allow their users to buy, sell, and hold crypto. Walmart is recruiting a crypto expert.
The adoption is expected to continue in the coming months, as it is attracting so much attention. If big Banks or Amazon get involved, this will launch a chain reaction, adding credibility to the system. Even though paying for products or services in crypto makes little sense for traders at the moment, the adoption itself will change the financial landscape, creating more uses for crypto and impacting the prices.
The Future of Cryptocurrency
Every trader must understand that the market is still in its infancy, and the digital assets are speculative Investments, as they have little history to base forecasts on. Whatever experts think or say, nobody can tell the future.
This means you should not invest more than you can lose, while the long-term building of wealth requires more conventional methods. Do not prioritize crypto over saving for retirement or paying off debt. Otherwise, if you wake up one day to see that the market has fallen, what will you do?