Blockchain Technology and Cryptocurrency’s Future: Five Experts’ Predictions Following a “Breakthrough” 2021
2021 was a massive year in the world of cryptocurrency. What’s next?
What is Cryptocurrency?
Before taking a close review of the various alternatives in Bitcoin’s direction, it’s best to take a step back and look at the meaning behind terms such as altcoin and cryptocurrency. A cryptocurrency, in broad terms as digital or virtual money that is made up of coins or tokens “coins.” While some cryptocurrencies have entered the world of physical reality using credit cards or other ventures, the majority are entirely intangible.
“crypto” in cryptocurrencies refers to the “crypto” in cryptocurrencies refers to complex cryptography that permits making and processing electronic currencies as well as their transactions through decentralized systems. In addition to this crucial “crypto” feature of these currencies is the general commitment to decentralization. Cryptocurrencies are usually developed as code by teams that create mechanisms for issuance (often, however, not constantly, using the process known as “mining”) and other control mechanisms.
We’ve witnessed Bitcoin achieve a new record price and regulatory discussions that could significantly impact the industry and more investment from institutions essential corporations. In all this, the public’s enthusiasm for cryptocurrency has increased this year. It’s becoming a hot topic not just with investors but also in popular media, thanks to all kinds of investors, from the long-standing ones such as Elon Musk to the kid from high school you met on Facebook.
The first quarter of 2021 was a “breakthrough,” says Dave Abner, the head of the global development department at Gemini, the most well-known cryptocurrency exchange. “Tremendous focus and attention are being paid to [the crypto industry].”
However, the market is still in its early stages and changing. It’s not easy to determine what the future holds; however, over the following months, experts are focusing on issues ranging from regulation to the institution-wide adoption of crypto payment to gain more insight into the current market.
While precise predictions are impossible, We surveyed five experts what they’re watching in the world of crypto for the remainder of 2021:
The majority of cryptocurrencies are created to be completely free of the control of the government; however, as they have gained more popularity, the fundamental aspect of the business has come under scrutiny. The cryptocurrencies modeled on Bitcoin are referred to as altcoins, or in some instances “shitcoins,” and have been known to try to present them as improved or modified alternatives to Bitcoin. While some of these cryptocurrencies could have features that Bitcoin doesn’t, achieving the level of safety Bitcoin’s networks provide is yet to be recognized in an altcoin.
Expect to see ongoing discussions about cryptocurrency regulation. The lawmakers across Washington D.C. and across the globe are trying to determine how to create rules and regulations to make cryptocurrency more secure for investors and less attractive to cybercriminals.
“Regulation is probably one of the biggest overhangs in the crypto industry globally,” says Jeffrey Wang, head of the Americas at Amber Group, a Canada-based firm that deals in crypto-related finance. “We would very much welcome clear regulation.”
China has announced on September 1 that any cryptocurrency transaction inside China is unlawful and effectively puts a stop to all crypto-related activities that occur inside Chinese borders. Within the U.S., things are not as clear. Federal Reserve Chair Jerome Powell stated recently that Powell is “no intention” of banning cryptocurrency in the U.S; however, Security and Exchange Commission Chairman Gary Gensler has consistently commented on his agency and the Commodity Futures Trade Commission’s role in the policing of the market.
Gensler recently said that the investors are “likely to get hurt” should stricter regulations not be implemented. In addition, Gensler said that the IRS is obviously interested in ensuring that investors know how to report the virtual currency when they file their tax returns.
As with all things related to cryptocurrency, regulation is a source of obstacles. “There are different agencies that may or may not have jurisdiction to oversee everything,” Wang says. Wang. “And it differs state by state.”
What could a new regulation have for investors?
The new legislation proposed by lawmakers could help the IRS identify tax evasion cases, particularly when it pertains to crypto. However, investors already have to keep track of any gains or losses made in cryptocurrency assets. However, the new rules could help investors accurately report the transactions made with crypto.
“This is because if the bill passes, exchanges will have to issue 1099-B tax forms with cost basis information to investors,” Shehan Chandrasekera, CPA director for tax strategies at CoinTracker.io, which is a crypto tax software business, recently informed NextAdvisor. “This will significantly reduce the crypto tax filing burden.”
Potential Crypto ETF Approval
SEC chairman Gensler recently suggested that investors could soon gain access to an ETF for cryptocurrency, an innovative and less conventional method of investing in cryptocurrency. A cryptocurrency ETF will let investors buy cryptocurrency directly through traditional investment brokerages with which they might currently have an account, such as Fidelity and Vanguard.
“We do it in the equity market, we do it in the bond markets, people might want it here,” Gensler stated during the Aspen Security Forum earlier this month and also acknowledged that there are already filings for crypto ETFs through his agency.
ETF Approval has been under review by the SEC several times in the last few years. However, none have yet been approved, similar to other regions such as Canada or the EU.
Larger institutional Cryptocurrency Adoption
Mainstream businesses across sectors have been interested in -and, in some instances, invested in blockchain and cryptocurrency by 2021. AMC, for example, recently announced that it will accept Bitcoin payments at the end of the year. Fintech companies such as PayPal and Square are betting on crypto by allowing customers to purchase through their platforms. Tesla is still going roundabout accepting Bitcoin transactions, even though the company has billions of dollars in cryptocurrency assets. Experts anticipate increasing amounts of this purchase.
“We’ve seen a tremendous amount of inflow of attention, and that’s going to continue to drive the growth of the industry for a while now,” Abner says. Abner.
Bitcoin’s Future Outlook
Bitcoin is an excellent gauge of the market for crypto generally since it is the biggest cryptocurrency in terms of market value, and the other markets tend to follow the same trends.
The price of Bitcoin has been on an up and down ride in 2021, ranging from an all-time high that was $60,000 back in April to less than $30,000 in July. In the last few months, Bitcoin has climbed back towards $50,000. This fluctuation is a significant reason why experts suggest that you limit your investments in crypto to a minimum of 5percent of your portfolio at the beginning.
However, how high will Bitcoin get? According to Kiana Danial, the writer of “Cryptocurrency Investing for Dummies.”
Danial claims numerous massive surges were followed by a pullback in Bitcoin’s value since the year 2011. “What I expect from Bitcoin is volatility short-term and growth long-term.”
Bitcoin is not an innovator, bringing in a wave of cryptocurrencies based on a decentralized peer-to-peer network, but it has also been the norm for cryptocurrencies, creating an ever-growing number of followers and spinoffs.
The world of cryptocurrencies is growing, and the next significant digital token might be launched today. Although Bitcoin is generally regarded as the pioneer in cryptocurrencies, experts employ different methods to evaluate coins other than BTC. It’s typical, for instance, that analysts attach an enormous amount of weight to the way they rank coins relative to each other about the market cap. We’ve taken this into assessment, but other factors could explain why digital tokens could be considered too.
Future of Cryptocurrency Future of Cryptocurrency
We can speculate on the worth cryptocurrency can bring investors over the next few months (and plenty of people will); however, the truth is that it’s a relatively speculation-based investment that is still in its early stages, without a lot of history to base your predictions. No matter what an expert believes or claims, there is no way to know for sure. This is why it’s crucial to only invest money you’re willing to risk and stick to the more traditional strategies for building wealth for the long run.
“If you were to wake one morning to find that crypto has been banned by the developed nations and it became worthless, would you be OK?” Frederick Stanfield, CFP at Lifewater Wealth Management in Atlanta, Georgia, told NextAdvisor recently.