2021 has been awaited by many as one of the best years for Bitcoin’s price appreciation. Following prior market cycles, the popular cryptocurrency should see a massive increase in value within this year, and there are many factors that will contribute to this.
In the following article, we share 4 trends you need to keep in mind, as they all act as catalysts to the eventual growth of BTC into the mainstream.
Trend #1 – Institutional adoption
The institutions are finally here, and we are still early! The economic and political instabilities of 2020 led to an increase of bailout packages which “dominoed” into massive inflation for the US dollar. This instability led many to the quest for safe-haven assets. MicroStrategy converted its complete balance sheet in Bitcoin in September last year, followed by more institutions who finally took the leap into the popular cryptocurrency. We saw companies like Square, Grayscale, Paypal, and CashApp all open up to the potential of BTC. With institutions gaining exposure in Bitcoin, we will see retail interest spark up soon.
Trend #2 – Increase in options & derivatives products
Over the past two years, we saw a major transition from spot-only trading to several financial products that allow traders more freedom of choice. Large exchanges like FTX and Binance now allow their users to access a large number of derivatives products which are more often found in traditional financial markets.
The most popular include futures contracts, perpetual contracts, swaps, and Bitcoin options trading.
Trend #3 – More regulations ahead
The growth of the crypto markets has caused many countries to reconsider their strategy when it comes to regulatory frameworks. At the moment, there is unclarity in terms of taxation, usage, and distribution when it comes to trading and long term investing. We expect to see the space to become more regulated in 2021, allowing more retail investors to enter without hesitation.
Trend #4 – Growth in NFT markets
Non-fungible tokens are nothing new (remember crypto kitties?). In 2020, however, they take on a completely new concept. Earlier this year we saw a massive spike of interest for NFT art as well as virtual land sales, both of which are expected to grow in popularity within 2021. We expect both creators and real estate to shift into a tokenized fashion that will decrease the barrier of entry and cause a more honest incentive.