We'll admit 2020 was far from a predictable year in the books, so having some insights into 2021 might be the beacon of hope that you are looking for. With insight into the world of cryptocurrency, we wanted to share five predictions that might continue to impact your choices as not only a consumer but also as a business owner. The team at Crypto Exchange gathered insights about all things cryptocurrency to bring you the top five trends in cryptocurrency for the upcoming year.
1. Mass adoption by consumers
As itcoin's price continues to rise, many have begun to enter into the cryptocurrency market for the first time. Many speculate that this uptake can be attributed to a fear of missing out (FOMO) on profits, while others believe buying currencies has become more accessible than ever before. Crypto Exchanges have continued to focus on user experience, bridging the gap between the user interface for traditional financial institutions and crypto exchanges. With the wide availability of platforms, including Crypto Exchange, it is clear that cryptocurrency isn't just for tech geeks anymore. It is also for the everyday user that just learned what blockchain is.
2. Mass adoption by businesses
Not only will cryptocurrencies continue to be adopted by people, but also by businesses. Paypal, one of the biggest global merchant networks, announced that they would allow users to store, buy and sell popular digital currencies, including Bitcoin, Ethereum and Litecoin. Additionally, the company announced they would also extend support to their subsidiary, Venmo. Since businesses that use Paypal and Venmo can now accept cryptocurrency as of early 2021, we believe it won't be long until other companies follow suit, to avoid losing out on additional business from crypto enthusiasts.
3. Central bank digital currencies
While central bank digital currencies (CBDCs) entered the international financial policy conversation seriously in 2020, they have only continued to gain momentum with the hopes for a public release in 2021. Several countries are verging a digital currency launch. Leading the charge is China with its Digital Currency Electronic Payment (DCEP) release. The Bahamas launched a CBDC known as the Sand Dollar, and Lebanon following with their currency to be released later this year. These countries are only the beginning, with a recent BIS report sharing that nearly 80% of central banks worldwide continue to research the feasibility of implementing their own CBDC.
4. Tokenization of anything and everything
In September 2019, Spencer Dinwiddie planned to tokenize his NBA contract extension, which amounted to nearly $34 million. Since then, crypto tokens have continued to gain popularity, representing fungible assets such as fractional art pieces in Asia, governance parameters, fund development, or security. The use of tokens is believed to help set up the market for enterprise adoption in 2021.
The tokenization of the world is also believed to help more people access global trade to boost market activity and create greater liquidity and market depth. With this system, the commodities market is significantly more efficient and open at all hours.
5. Tax enforcement and steeper regulations
With widespread adoption, greater tax enforcements and steeper regulations are believed to be right around the corner. As popular cryptocurrencies like Bitcoin continue to increase in value tremendously, it is only a matter of time that tax authorities will be motivated to step in to ensure parties are being protected and that governments are being attributed the proper proportions. As the economy becomes increasingly digitized, especially amidst the Covid-19 pandemic, digital banking, cryptocurrency, and blockchain technology are believed to be among the most significant areas of concern by public authorities. The European Union is already working towards implementing a regulatory system across all member countries, suggesting the rest of the world will not be far off.
Crypto Exchange can offer you one of the greatest opportunities to take advantage of these upcoming trends in the new year while also offering you opportunities to learn more about popular cryptocurrency topics in the learning center.