2020 is slowly coming to an end as we cruise through the last and most eventful quarter. With Bitcoin holding a support of $13.000, positive sentiment is once again starting to build up in the markets. Investors choose to buy Bitcoin to store their wealth eyeing more economic uncertainty in the year to come.
By all means, cryptocurrency has become more important than ever, and people are finally starting to take notice. The big question is how this translates into the adoption rates of the crypto world. This is exactly what we will be discussing in this article. After reading this post, you should have a better understanding of the current sentiment and where the crypto industry is headed within 2021.
Is the public more aware of Bitcoin?
When looking at the past 3 years, we can observe a relative buildup, both in price momentum and awareness. At the time of this writing, the majority of investors are still not fully aware of Bitcoin’s purpose, and how it aims to restructure the financial system that we are currently using. For more, Bitcoin is just a store of value that is detached from other markets, with a high potential of growth.
But this is not all Bitcoin is, and we are relatively confident that 2021 will help th world see this as well. Bitcoin is the only truly decentralized currency that allows people that transact without eh need of a middleman. This is desperately necessary in our current economic situation, given the unlimited money printing of the US government and the unfortunate results of this practise. Within 2021 we will most likely “feel” the effects of massive inflation rates, negative interest rates, and high unemployment. It is only then that the public will finally start seeing the long-term potential of Bitcoin, and not just its money-making ability as a shot-term investment.
Institutions are slowly starting to take notice
Some publicly listed companies have already done their due diligence and understand this. Software development company Microstrategy and payment system Square both invested a significant amount of their cash reserves into Bitcoin, paving the way for those that are about to follow.
These companies did not just choose to place a bet on the popular cryptocurrency, but also to be the first ones to show how to go about the process. More specifically, Square founder Jack Dorsey shared the process his team followed to make the large purchase without disrupting the market.
Here is how this practise affects the adoption rates of cryptocurrency in the year ahead of us:
What does this mean for the future?
The thing about growth is that it first happens slowly and then all at once. At the time of this writing, Bitcoin has gone through the dready bear market which, by all means, was a slow transition period. We are now entering into a period where everything will happen simultaneously. This could translate into a bull market that will surpass even the wildest imaginations. But before that happens, there are still a few challenges that we need to tackle:
Bitcoin is still hard to understand
The public is still unaware of Bitcoin’s potential and main purpose. This is totally normal, since the majority of people are not financially oriented and non-tech savvy. For this to change, there will need to be an increased amount of free education available in an easy to understand language, and some way to incentivize those who choose to opt in. This is currently starting to happen when looking at programs like Coinbase Earn or CoinMarketCap’s recent efforts to create a similar concept.
Another issue that is holding the mainstream public on the sidelines is the manipulation of the markets. While most investment markets are tampered and affected by external factors in one way or another, the crypto space is still really early in its stage of development, which makes it much easier to control. This in turn leads to increased volatility and large price swings.
For this to be resolved we would need to see the price increase to a point where even the largest holders will start selling their funds, spreading them among more smaller investors, and thus removing the potential of a single point of failure (or, in this case, control).
Easy access (UX, UI, & FIAT onramps)
Another thing that needs to be addressed in 2021 is that of accessibility. While the biggest crypto companies are currently building tirelessly to accommodate mainstream adoption, we are still lacking in the areas of:
You should now have a better idea of the current conditions of the market and how the hints of today translate in the success of tomorrow. However, this is just the beginning of the process. We recommend that you perform additional research to form an educated and well-rounded opinion for yourself, and prepare accordingly.
by julia-beyers on 2020-11-04 07:27:07