What is the future of cryptocurrency in 2020-21? This is a difficult question to answer. This year, the attention of digital currency investors will focus on the development of national cryptocurrency, cryptocurrency derivatives market and mining. In this article, we will discuss all crypto trends in 2020-21.
Is Bitcoin the star of the future currency?
Important trends this year will affect the cryptocurrency market in 2020-21. For example, the rapid development of the market for crypto derivatives, mainly based on Bitcoin.
On the one hand, the United States believes that the emergence of regulated trading floors is positive because they attract institutional investors. On the other hand, derivatives have not fully contributed to the bull market. Although Bakkt’s supply contracts are less speculative, sometimes the underlying Bitcoin futures are actively trading, even if the underlying assets are significantly reduced.
You can also recall the recent speech by Christopher Giancarlo, head of the US Futures Market Commission. He is confident that US officials will deliberately initiate regulated trading of Bitcoin futures on CME and CBOE at the end of 2017, in order to burst the bubble in the cryptocurrency market under the pressure of short positions.
Another foreseeable event is the Bitcoin halving, which will happen in May 2020-21. Many people see it as a factor in price increases.
You can learn more about Bitcoin (BTC) price prediction and halve in our article.
Future cryptocurrencies worth investing in
Throughout 2020-21, we will see that the altcoin crisis may continue. There are thousands of tokens on the market. However, the vast majority have no liquidity, no value, and on demand. They are likely to disappear gradually.
Ripple claims that Ripple Coin (XRP) is used by two corporate clients for cross-border transactions. If Ripple has been developed as a utility token that converts one currency to another during the transaction, its price is actually not important. Therefore, it is not an investment asset. The demand is not very high. Ripple is selling more and more tokens to customers.
Ethereum is undergoing major changes, and the future of the main blockchain platform for decentralized applications will depend on this. The update is so large that it is informally called Ethereum 2.0. It should significantly improve the scalability of the network. The plan is to switch to Proof of Stake (PoS) and introduce sharding. The update will continue throughout the year and will affect the fluctuation of the price of Ether.
Another important factor is how Ethereum 2.0 affects the decentralized application market. Hope this will be positive. Last year showed that blockchain is not only very suitable for gambling and trading but also very suitable for video games.
As for Tether, Bi nance Coin (BNB), and other native exchange tokens, their prices are entirely determined by the activities of traders. Exchange tokens are one of the most popular types of tokens. The hype recession after 2017 has not affected the spot market. Its influence continues to expand. The exchange has become more standardized, safe, and there are too many services. A system of transparency in their work is gradually being established.
Does cryptocurrency have a future?
Cryptocurrency is not only developing in terms of price. For example, domestic currencies and derivatives have opened up new prospects for the crypto market.
Central Bank Digital Currency (CBDC)
Today, the most anticipated currency is digital renminbi. This will be an important step in changing the financial system. The authorities are actively introducing many modern technologies into the daily lives of their citizens, so it can be expected that, at least in this country, the cryptocurrency will spread rapidly as planned by the ruling party.
For other countries, 2020-21 should be the year of their own digital currency issuance. They are likely to appear after the renminbi is encrypted.
CBDC appeared on the national agenda mainly because people realized the potential of cryptocurrencies (especially stable coins). Organizations such as the International Monetary Fund and the Bank for International Settlements (BIS) have repeatedly stated that the central bank should start developing its own cryptocurrency.
All the above facts tell us that the country’s transition to digital currency is one of the elements of the next stage of human development. Its appearance is only a matter of time.
The future of mining
The mining market is becoming more and more mature. If the price of cryptocurrency mining does not start to increase rapidly as it did in 2017, we do not expect to obtain excess profits from cryptocurrency mining. At the same time, mining will continue to attract institutional investors.
The equipment market is saturated today. Manufacturers have learned how to increase sales flexibly and quickly. These are the driving forces for network growth and maintain a fairly stable medium-level mining profitability.
Institutional investors will play an increasingly important role in the development of the industry. The factor that determines the success of an investment is the cost of electricity. The capacity that uses less than 0.03 kWh of energy is not only more profitable but can continue to operate under almost any situation on the market.
In the near future, the main growth regions will be the United States and Canada. North America, as a region with well-developed laws and well-established investment protection mechanisms, is mainly of interest to the most prudent investors.
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