Crypto predictions for 2021

 Luno reports in a recent customer newsletter that the top cryptocurrency trends to watch out for in 2021 are increased volatility, tighter regulatory oversight, and continued support from large institutional investors.

Marius says: “2020 was a fitting test of pressure as bitcoin hit a $ 5,000 low in March and a $ 28,000 high. The new year is following the same trend as the price has already reached the $ 40,000 level [R607100] ”Ritz, General Manager of Luno Africa.

It was also the year that institutional investors started to actively support Bitcoin: MicroStrategy, Mode, Square, and others transferred part of their cash reserves to cryptocurrency as a hedge against the inflationary potential of fiat currency.

Corporations, institutional investors, family offices, and hedge funds all want Bitcoin to diversify their portfolios. Although they are small compared to traditional markets, institutional investment will continue to grow as the economic impact of Covid-19 becomes more evident, ”says Luno.

Mass adoption will grow in 2021

Despite an extraordinary 300% rise in the price of bitcoin over the past year, mass adoption is set to grow in 2021. Major players are increasing their investment and interest in cryptocurrencies. The retail market has also been gripped by a boom in crypto assets, heightened media interest, and ease of access to cryptocurrencies.

With each upward movement, more and more investors enter the market for speculative purposes. This increases the user base and brings crypto closer to the critical mass required for widespread adoption of payments and other use cases.

A recent poll by Luno showed that while respondents in Europe and Asia do not find the single world currency valuable, Africans are willing to accept the global currency. More than half of African respondents believe that a global currency will improve the existing financial system.

Libra / Diem Liberation

Libra, a cryptocurrency project that Facebook kicked off loudly in 2019, went relatively quiet in 2020 and made major changes to the Intended Proposal, including a rebranding to Diem. The project is being spearheaded by some of the world's largest companies, including Uber, Spotify, PayU and Andreessen Horowitz. When that unfolds, Luno says, Dim could provoke a new wave of big companies that want to intervene in their coin mining game.

The new US administration still doesn't know what to do with cryptocurrency.

US President Joe Biden has appointed Janet Yellen, who is not a fan of Bitcoin, as his cabinet secretary. Given the volume of institutional money flowing into cryptocurrencies and legislation allowing banks to hold bitcoins on behalf of their clients in 2020, there is likely to be a major backlash from Wall Street that could make it difficult to maintain any bearish positions.

There are also a few US Senators who are ahead of cryptocurrencies, so it will be interesting to see if other countries follow the United States' lead if the country becomes more crypto-friendly.

More organization on the go

As the crypto space develops rapidly, regulators around the world are accelerating efforts to incubate or regulate cryptocurrencies. In South Africa, the proposed rules were proposed by the Reserve Bank of South Africa, and the Financial Sector Supervisory Authority (FSCA) published a draft declaration of cryptoassets as a financial product last year, meaning virtually any legal entity or individual acting as an intermediary. there must be services related to cryptoassets. Cryptography is a certified financial service provider.

Internationally, we expect new directives to come into force this year. Several central banks negotiated central bank digital currencies during 2020, and many of them are now either in the research phase or far away, ”says Luno, who works with regulators around the world and in South Australia.

Ethereum blockchain competition

Ethereum 2.0 Phase 1 was finally launched on December 1, 2020 after years of preparation. This is a huge transition for Ethereum, something unprecedented in cryptocurrency history that could keep Ethereum in motion for the next two years, potentially opening up opportunities for competing blockchains with similar offerings. After a rapid transformation, Ethereum can move closer to its goal of becoming a global ecosystem for companies across all sectors and industries.

Cryptocurrency prices - predict fluctuations

“In a year of economic uncertainty, Bitcoin has not lost ground, surpassing similar gold and other stocks and stocks. We've seen weeks of exponential growth and new highs in general, but the cryptocurrency market has also been hit hard - all in tech