After December 25th, Bitcoin climbed to all new record highs, breaking the $25,000 price barrier. And the experts predict that the Bitcoin price surge is far from done, in fact, some even think that Bitcoin could break $100,000 per coin in the coming 2021 year. Will this in fact prove to be true? 2021 has been slated to be a year of changes, some of which may have huge implications for the cryptocurrency world.
The Changing Presidential Administration
The experts think that the price of Bitcoin will rise in 2021, but this of course, is only a rough prediction. And if history is bound to repeat itself (which it often does) the cryptocurrency markets typically take a dive during the US presidential administration change.
The Trump administration, though generally hated for its social policies, actually pushed through a number of positive changes for the cryptocurrency world. In July of 2020, the OCC (Office of the Comptroller of the Currency) passed a regulation in which national banks can now hold custody of crypto funds. The Biden administration is slated to take over in late January, and as of the writing of this article, no one from Biden administration has specifically commented on this regulation, but the acting president of the OCC, Brian Brooks, fears the worst. He has heard rumors via a statement by congresswoman Maxine Waters, that there are plans to dismantle all the framework put into the cryptocurrency world by the Trump Administration, and he is not at all positive about the future prices of the coin. He’s especially worried about what this means for the future of stablecoins, many of which rely on these regulations in order to function as coins. Consumers are currently experiencing a new found feeling of safety thanks to this set of regulations which allows them to store cryptocurrencies in a bank. And without these vital regulations, Brooks fears the crypto market could stall, or even crash, as people will once again become fearful of the future of the market.
Coronavirus
Despite massive containment efforts, Coronavirus is still a worldwide concern. And the infection numbers aren’t likely to fall anytime soon as we enter the middle of flu season. Although a vaccine has been deployed, there just simply aren’t enough available for everyone, and most countries are only vaccinating those that are at risk, or work in the healthcare industry. And in March 2020, at the peak of the Coronavirus pandemic, Bitcoin fell to its lowest point of the year. And critics of the coin haven’t forgotten that.
Back to politics, the Biden administration has also mentioned the possibility of America going back into a full lockdown situation with his inauguration, which, as history has shown, has huge economic implications. And many critics cite that this could once again cause the value of the coin to plummet to below $10,000. Of course, this talk of a lockdown could be all talk, and it’s possible the infection rates will decline by the time Biden enters office, there is simply no way to predict for certain.
Hedge Fund Crypto Involvement
But besides just causing market crashes, Coronavirus has caused something else in society, and that is a push towards using all digital money. After the lock down in March 2020, when a number of businesses reopened, they reopened saying they would accept non-cash forms of payment only in order to try and slow the spread of germs. Cash has long been considered “dirty” and many individuals were happy not to use it anyways. And Coronavirus wasn’t the only culprit, because shortly after, the United States announced a coin shortage, so many vendors switched over to electronic forms of payment out of necessity, because they could no longer provide proper coin change for cash.
And this is just the beginning of the full digitizing society, which has been coming for a number of years since the invention of the debit card. A number of companies have read the writing on the wall and have they themselves become invested in cryptocurrency. The most notable is Tudor Investment Company, and they are only one of many hedge funds which has now found themselves interested in investing in the cryptocurrency world. It’s important to remember that hedge funds trade their investments regularly, so the fact that they are investing isn’t always a good indication of market stability. Especially if a number of large funds decide to cash out at once.
PayPal
During the year 2020, payment processor behemoth PayPal announced that beginning in January 2021, users will be able to buy and sell cryptocurrency on their platform, as well as use it as a form of payment anywhere PayPal is accepted. The platform opened up this feature early, to a number of select users, who were able to use the feature as early as November 2020. The catch? Well users must buy the cryptocurrency they use for purchases from PayPal, and they cannot transfer coins from any other wallet they may maintain. This means, PayPal itself had to buy a large amount of cryptocurrency to have it available to sell to users. Not only that, but a lot of users have had to re-buy crypto to use on the platform. And this has caused a large spike in sales, driving the price of Bitcoin up.
Of course, the average user still hasn’t been able to use the PayPal cryptocurrency feature yet, so there’s a chance the price could spike even further after January 1st when this happens. But there’s also a chance that a number of investors are buying in preparation for this predicted spike, which may or may not actually happen.
Overall, cryptocurrency, specifically Bitcoin, has had a crazy year, from dipping down below $6,000 a coin in March, to rising to new heights of above $25,000 by the end of the year. But this didn’t just happen randomly, the price of Bitcoin rose because of new regulations, a societal shift, and new technology getting involved, and it is impossible to know if these changes will continue to be positive for the coin in the coming year. Experts hope the coin will continue to rise in value, and maybe it will, but this is something that only time will be able to tell.
This article was brought to you by the provably fair Bitcoin Games on MintDice. Originally posted on MintDice.com.