2020 was quite the year. The COVID-19 economic recession brought about mass unemployment, huge decreases in per capita incomes resulting in extreme poverty, and vast economic disruptions across the globe. Frankly put, in most circles, COVID-19 and 2020 represent terror, shock, and dismay. Conversely, the COVID crisis had arguably positive effects on the cryptocurrency and blockchain market. Between Bitcoin surpassing $20,000 and PayPal’s announcement that it would host cryptocurrency buying and selling, 2020 will go forward in history as the year cryptocurrencies re-legitimized themselves following 2017’s boom and bust.
As this mad year winds down, we want to look forward to three blockchain and cryptocurrency trends to expect in 2021.
Big Banks and Financial Institutions Will Continue to Assert Themselves in the Market
2021 will continue to see the further growth of the blockchain and cryptocurrency sectors. We hope to see exponential growth in the coming years. The growth and legitimization built by Bitcoin hitting $20,000 again and PayPal and Square joining the ranks of financial institutions involving themselves within the crypto market will bolster other mega-players in the financial world to join the fold before it’s too late. One trend that we’ve seen throughout the world due to COVID-19 is the widespread adoption of digital payment as a new standard. It is no longer optional for financial institutions to embrace digital mediums.
Blockchain Fraud on the Rise
The wider adoption of cryptocurrency and blockchain will also result in higher rates of cryptocurrency fraud. 2020 was a year plagued by increased fraud including a Youtube crypto scam, the IOTA shut down, supercomputers in Europe being hacked, and countless others. As time goes by and the crypto and blockchain market grows, so do the attempts to hack and undermine it. It is simply the natural progression of the construction of new technological infrastructure. That said, increased hacking efforts will ultimately lead to increased infrastructural strength.
Increased Regulation in the Cryptocurrency Market
Our two previous predictions lead us to our last. Logically, as larger institutions become major players within the market and fraud increases, regulations will also increase to mitigate risk within the field. Moreover, as the financial market moves toward digitalization by historic events such as the COVID-19 pandemic, analysts expect a wider range of regulation in the sector. The EU, for example, is officially on a campaign to set regulations for the cryptocurrency market by 2024. You can learn more about the EU’s legal strategies here.
Altogether the increased presence of large financial institutions and a dramatic move toward digital banking is a positive to the cryptocurrency market and 2021 will surely be a great year to invest!