Cryptocurrency Experts Make Their Predictions For 2021

2020 was a very successful year for the entire cryptocurrency world. Despite the many financial, economic and political upheavals that have happened to us over the past 12 months, the blockchain industry has made significant headway. The outgoing year saw the long-awaited launch of Ethereum 2.0, a real explosion of the Decentralization Finance industry, and the price of bitcoin set a new historical record, significantly surpassing the indicators of 2017.

Below is a list of predictions for the three main areas of the cryptocurrency world in 2021: the development of blockchain technologies, bitcoin, and decentralized finance (DeFi).

Market research company Forrester predicts that blockchain and distributed registry technologies will continue to gain popularity this year. Forrester Chief Analyst Martha Bennett said the company's forecasts are based not on the continuation of trends, but on changes. The report predicts the launch of 30% of global blockchain projects within the next year. The company's analysts believe that the development of new initiatives, including in the blockchain sector, is associated with changes in market and economic conditions. Of course, this is also influenced by the Coronavirus pandemic.

In addition, most of the planned projects that will enter the development stage in 2021 will use enterprise blockchain platforms. The use of cloud technologies (in blockchain development), provided by Alibaba, Huawei, IBM, Microsoft, OneConnect and Oracle, will also grow.

In total, Martha Bennet made three predictions for blockchain technology in 2021:

• 30% of projects globally will implement blockchain into production.
• China will make the fastest progress in adopting blockchain technology in its new digital infrastructure.
• Permissioned blockchains remain predominant in the long run.

2020 was a real gift for the cryptocurrency industry. Against the background of the deteriorating economic stability in the world, which was caused by the coronavirus epidemic, cryptocurrencies were in very high demand. Large companies, private investors, and foundations have shown great interest in bitcoin as a store of capital. Such interest resulted in bitcoin rising to a new all time high at the end of the year.

Mark Tepper, CEO of Strategic Wealth Partners, believes that the price of bitcoin can reach as high as $100,000 by the end of next year, though he calls the $ 40,000 mark more likely. 

“You can kind of compare this to Tesla," he said in December. "Tesla’s up over 500% this year. In my opinion ... I think bitcoin could potentially be the Tesla of 2021. It could, in my most bullish case possible, get to 100K by the end of next year. That’d be my bull case. I think my base case is a little closer to it doubling up to about 40K by the end of 2021.”

Anthony Pompliano, co-founder of Morgan Creek Digital, is also confident in the great success of Bitcoin next year. Pompiliano is basing his predictions on the fact that Bitcoin is gaining immense popularity among institutional investors and billionaires, which means a lot of capital is entering the cryptocurrency market. 

The latest news on this topic concerns MicroStrategy. The company invested $650 million raised from investors in 29,646 BTC at an average of $ 21,925 per coin. MicroStrategy now owns 70,470 bitcoins, spending $1.125 billion to purchase at an average price of $ 15,964 per bitcoin.

Ethereum, the second most popular coin, may become much more interesting for investors in the near future. The Ethereum 2.0 network was recently launched, where consensus is achieved through staking. This can bring passive income to token holders, and given the reputation of Ethereum and its founder, Vitalik Buterin, we can expect a significant influx of funds into the new blockchain throughout the next year.

Decentralized finance has become an industry phenomenon in 2020. However, as many representatives of the cryptocurrency community have already seen, DeFi still does not look mature enough and requires a lot of work on technology, reputation, and security before it will see widespread adoption.

Forrester has already released a report that talks about the negative impact of the decentralized finance market on the development of enterprise blockchains. DeFi's rise in 2020 has led to questionable activity on public networks like Ethereum. And now some companies are very dubious about the impact of blockchain on the financial industry.

"This phenomenon has re-associated public blockchains and cryptocurrencies with the Wild West and will therefore continue to alienate decision makers about compliance and other risks.", the Forrester report said.

Based on this, we can expect a leap forward from large finance and blockchain companies that can offer the skills, experience, and budgets for a young emerging technology. Indeed, despite some skepticism, most businesses see huge potential in this industry, and will try to implement high-quality DeFi products.

Kyle Thomas, CEO of Provide, an enterprise blockchain vendor that works with SAP and Coke One North America, begs to differ, telling Cointelegraph that organizations will soon see public blockchains in the same way as they do the internet: 

“A lot of mindshare is up for grabs as ‘Enterprise DeFi’ becomes more of a reality with each passing day.”

Kevin Fen, PwC cybersecurity expert and former COO of enterprise blockchain company VeChain, agrees. He said that while the DeFi space may resemble the 2017 ICO boom, it is different in that DeFi proves the great potential of blockchain in the world of finance.

"If we look at DeFi from the other side, it shows how blockchain can be used in the financial sector, and this is not enough among enterprise blockchain implementation cases."

The outlook for the development of the DeFi industry by big business was confirmed by recent news. A large public company xSigma has already announced the launch of its first decentralized finance products. xSigma Defi is a blockchain R&D lab project that was created by ZK International ZKIN. Over the next year, their team plans to launch a DEX (Decentralized Exchange) for trading stablecoins. And by 2022, xSigma will launch a dollar stablecoin.

Blockchain is already used by Amazon, BNP Paribas, Anheuser-Busch Inbev, Citigroup, CVS Health, Facebook, Google, Hewlett Packard, IBM, JPMorgan Chase and hundreds of other large public companies. Now is the time for decentralized finance that is getting the attention of corporations.

Such news perfectly demonstrates the growth of interest from large capital not only to decentralized finance, but also to the entire cryptocurrency market, including blockchain technologies. Whereas previously bitcoin was something for enthusiasts, criminals, or countries with weak economies, now the focus has shifted to corporations. Large companies have appreciated the advantages of decentralized technologies not only in terms of investments, but also as instruments with huge potential for development.