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Crypto in 2021: Top Trends And Events That Will Shape The Crypto Space This Year

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While 2020 might have been a year filled with ups and downs, cryptocurrencies ended the year with a bang. The crypto king and flagship digital currency bitcoin, started the year at $7000 and rose to almost $30,000 just as the curtains closed in 2020. A whooping 400% growth in 2020 alone.  

With such impressive performance echoed through the crypto space in 2020, it is natural to envisage great things for crypto in 2021. Some of the biggest trends of the previous year could continue in 2021 on a more grander scale. 

How crypto will play out in 2021 cannot be accurately predicted, crypto after all is full of surprises but there are trends and and events that will leave a mark on crypto this year.

Influx of Big players

The influx of institutional investors in bitcoin in 2020 made the crypto community go wild. Companies like MicroStrategy, Square and Mass Mutual, moved a massive chunk of their cash reserves into bitcoin. The spikes in bitcoin prices can be attributed to the bold moves by institutional investors. 

This trend of big players entering the bitcoin scene is expected to continue in 2021 which could invariably lead to even more ATH (all time highs). 

The $425 million investment by MicroStrategy already doubled in value. More big players will want to get a piece of the crypto action. There are more massive companies that might get in on crypto. A lot of traditional financial institutions will likely turn to crypto in 2021. 

More institutions turning to crypto will mean a massive surge in use cases. Utility has been a major challenge for crypto when it comes to mainstream adoption. More people using cryptocurrencies for daily transactions and not just acquiring it for profit maximization will increase chances of mainstream crypto adoption.  Companies like PayPal, Square already facilitate crypto use cases. More institutions going into crypto will increase use cases. 

Will governments join the trend?

Will governments invest in bitcoin in 2021? If they did, it would be huge for crypto. While it might seem unlikely, it is happening indirectly of sorts. The Norwegian government owns about 600 bitcoins. This is so because it owns a 1.51% stake in MicroStrategy.

Government interest in crypto will increase once crypto becomes big enough. An open investment by a world power for example will spark a very wild waze of frenzy. FOMO levels will go through the roof, the effects of crypto will be unprecedented.

Role of Facebook’s Diem in crypto adoption.

Facebook backed digital currency, diem, formally known as Libra will play a massive role in crypto adoption in 2021. The currency is due to launch this month. 

Facebook has about 2.7 billion users across all the platforms it owns. A currency backed by facebook could introduce crypto to a huge number of people. If the currency is easily available and accepted as a form of payment on facebook’s platforms, not only will crypto use cases go through the roof but the value of the currency will increase rapidly. 

Will Elon Musk make a major bitcoin move?

Elon Musk’s fraternization with bitcoin has left some unsure of what he truly feels about the currency. Elon Musk is no stranger to crypto but hasn’t made a major public move in the space yet. 

Recently the SpaceX CEO caused quite a stir in the crypto community on Twitter after he responded to Michael Saylor, CEO Microstrategy’s reply.

Michael Saylor’s reply read “If you want to do your shareholders a $100 billion favor, convert the Tesla balance sheet from dollars to bitcoin, other firms on the S&P 500 would follow your lead and in time it would grow to become a $1 trillion favor.”

Micheal implied Elon joined the institutional investors to convert Tesla balance sheets to bitcoin. Elon Musk’s reply of “are such large transactions even possible?” Sparked thousands of comments. The excitement that Elon would even consider it made the crypto community go wild.

Such a move by Elon would have an impact on crypto that never been before. TSLA stocks which have grown by an impressive 738% in 2020 alone will call for a lot of companies to follow Elon’s footsteps.

It is however not sure that Elon would make such a move. His take on crypto could be said to be positive but no one can say for sure if Elon will take Michael’s advice. 

How will the Biden administration affect crypto?

The current president of the United States Donald Trump has made it clear he does not have a soft spot for crypto but now that new president Joe Biden will be coming on board in a few weeks, will there be changes?

While there’s general optimism that the new administration will help crypto thrive, it is also possible that things could play out differently. 

Janet Hellen who is the president elect’s nominee to head the Treasury department isn’t a fan of bitcoin. According to her many of the the transactions done with bitcoin are illegal and ilicit. Given that a lot has changed since she made the comment in 2018 and renouned institutions are investing in bitcoin, Hellen might have a change of heart about the digital currency. 

A crypto friendly United States will lead to a crypto friendly world. 

Decentralized Finance (DeFi)

DeFi was a big part of crypto in 2020 and it is definitely a trend that will not oy continue in 2021 but grow also. DeFi growth in 2020 was phenomenal, starting the year with $683 million in total value locked (TVL) and spiking to 14billion at the close of the year. That is a mouth watering 2000% growth in only one year. 

DeFi is extending financial services into the decentralized sphere. Services that could only be provided by traditional financial institutions are now being offered on a decentralized platform with crypto. Insurance, mutual funds and lending are now available to the ubanked. These financial services are now available only digitally. 

There’s more coming to DeFi in 2021. While it is still a relatively new phenomenon, it will receive significant attention in 2021. 

Ethereum

A significant about of DeFi protocols were built on the ethetreum blockchain. Ethereum will be continuing with another phase of its upgrade in 2021. There will be a lot going on for ethetreum in 2021. 

Ethereum saw over a trillion dollars in transaction in 2020 and the number is expected to increase this year. 

What is known for sure.

Cryptocurrencies are here to stay and are not going anywhere for a long time. There could be setbacks even this year but crypto will die out as a result. Mainstream adoption might not come in 2021 or subsequent years but it is very imminent. 

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Bolu Abiodun is a recent graduate of Theatre and Media Arts, Federal University Oye-Ekiti. A journalist with over a year's experience on the job. A former editor at American Media company Project Forward, he is a skilled content creator, social media manager and digital marketer.

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Bitcoin

The Great Mining Migration from China to the U.S. Explained

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Bitcoin mining

Coming off the heels of China’s now infamous crypto crackdown, the mining rate in the U.S. has now surpassed that of China for the very first time. With a hashrate – a term used to describe collective computing power of miners around 35.4% in July, the hashrate in the U.S. is up 428% compared to September 2020.

In a move dubbed the “great mining migration“, miners in China had been moving towards more crypto friendly countries since May, when the Chinese government called for a crackdown on bitcoin mining and trading. Some of the locations thought favorable enough to entice mining operations include Central Asia, Eastern Europe, the U.S. etc.

However, it is important to bear in mind that mining operations are extremely energy taxing. For said reason, many of the bitcoin miners who had migrated to the U.S. set out for the U.S. state of Texas, one with one of the lowest energy prices in the country. Another favorable advantage for miners moving to Texas is the crypto-friendly political atmosphere regarding cryptocurrencies.

A criticism often levelled at bitcoin mining is that it is bad for the environment and certainly so seeing the enormous amounts of energy bitcoin mining requires, most of which is supplied from fossil fuels. The mining migration has brought about a trend where miners are actively seeking out renewables and or nuclear power, especially in the U.S. Miners are now clustering around states such as Washington, New York and unsurprisingly Texas.


The U.S. is not the only country to have benefitted from the aftermath of Beijing’s anti-crypto policies. Kazakhstan, the central Asian nation has also seen its share of the global hashrate grow with current levels around 18.1%, just behind the U.S. However, many believe that the Central Asian nation is just a junction on the larger trend of miners moving westward. Also, considering that most of Kazakhstan’s energy is derived from coal and a new law to further tax crypto miners in 2022, It stands to reason that many mining operations will eventually migrate from Kazakhstan.

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Business

From Libra to Diem: What happened to Facebook’s Digital Currency plans

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Facebook digital currency
Source: Getty Images (modified)

In 2019, Facebook Inc. announced the Libra, a digital currency project being developed by the company. Libra was unveiled to be a blockchain based stablecoin backed by bank deposits and short-term government securities and was to be integrated into Facebook’s services like Messenger and WhatsApp. The Libra blockchain was said to be able to handle 1000 transactions per second, in stark contrast to Bitcoin’s 7 transactions per second. Needless to say, the news that the largest social media company was working on a cryptocurrency rocked the market for a while. But for some reason, we haven’t seen anything really significant happen since then. Why?

First off was the regulatory hurdle. It would appear that Facebook realized that it didn’t have top marks in the trust department, especially in public opinion. To this end, the Libra project was grilled by U.S lawmakers in July 2019 and the central theme was the issue of trust and data privacy. Other regulators also commented on the issue, with European Central Bank board member Benoit Coeure reportedly saying that digital currencies such as the Libra could challenge the supremacy of the U.S. dollar. Similarly, France’s and Germany’s finance ministers at the time had expressed concerns over the Libra, citing risks around financial security, investor protection and anti-money laundering laws.

Libra also faced the hurdle of its project partners dropping out of the initiative. Founding members eBay, Visa, Mastercard as well as PayPal withdrew from the project which may have had a hand in stalling it. The regulatory scrutiny surrounding the project and Facebook’s own unpalatable reputation might have influenced the decisions of the partners who left the project.

This story would be incomplete without mentioning the efforts at rebranding which morphed the project from Libra to Diem in late 2020. These efforts may have been subtly aimed at distancing the digital currency from the scandals and scrutiny that plagued Libra as a result of its association to Facebook. However, those efforts haven’t been particularly successful. As a result of these factors and more, the Diem association scaled back its earlier hoped for global launch and instead settled for a U.S. stablecoin. That doesn’t seem to have happened.

All in all, it would appear that Facebook is adamant in the pursuit of this blockchain system. However, regulators aren’t completely convinced. The headache seems to be about the issues around it’s possible widespread use, considering the amount of Facebook users. The apprehension is about such a currency’s competitive power with other fiat currencies as well as privacy concerns.

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Africa Blockchain Institute

Africa Blockchain Institute Organized The First African Blockchain Summer Bootcamp For Teenagers In Ghana

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In the spirit of catching them young, the Africa Blockchain Institute organized the first-ever Blockchain Summer Bootcamp for teenagers (age range 13 to 19 years old). A successful Bootcamp, according to the participants’ testimonials and stakeholders, held at the OpenLabs, Ring Road, Accra Ghana, between Monday 2nd August, and Friday 6th August 2021. 

The teenagers applied from across Africa, and selected participants all converged at the OpenLabs, Ghana, for an intensive five days of learning, interacting, and implementing personal  Blockchain projects. The participants were divided into three significant tracks, thus; Blockchain Development, Blockchain for Creatives and Blockchain Entrepreneurship. 

Blockchain Summer Bootcamp for Teens by ABI
Blockchain Summer Bootcamp for Teens by Africa Blockchain Institute

Across these three tracks, the teenagers learnt introductory units to Blockchain Development for societal challenges, Blockchain evangelism, Non-Fungible Tokens, and how Cryptocurrency works. Another highlight of the program was the excursion to the Accra Digital Centre, where the Boot Campers were introduced to the tech ecosystem and feel of the Ghana Tech Lab and Accra Innovation Hub spaces. A visit was also made to the Museum of Science and Technology, and the teenagers got to understand the history of technology in Ghana. 

Worthy of mention was the panel session aimed at motivating the students to pursue a career in technology. While making his comments during the panel session, the founder of BankLess Africa, Mr. Muntala Mohammed Shaibu, urged the teenagers to stop seeing themselves as too young to experiment with new technologies. In her remarks, Ms. Elohor Thomas, CEO & Co-Founder of CodeLn, urged the teenagers to continue to explore their interest in technology and blockchain early.

Blockchain Summer Bootcamp for Teens by ABI
Panel Session, Blockchain Summer Bootcamp for Teens by ABI

The Bootcamp ended with personal project presentations from the Blockchain Development and the Blockchain for Creatives & Entrepreneurship tracks. Projects such as NFT blogposts, Blockchain product reviews and Blockchain for transport and logistics were presented. The best presentation won the OpenLabs scholarship for Robotics Course. Thanks to Dr Sujith Jayaprakash, the Director of OpenLabs, Ghana, for the offer of scholarship. In his closing remark, the Executive Director of the Africa Blockchain Institute, Mr. Kayode Babarinde, urged the teenagers to continue using the  skills and knowledge gained during Bootcamp to explore Blockchain-related solutions further. We also appreciate Mr. Ganzaro Omar, Chairman, AfroBlocks, for his supports, and fostering collaborations with the Ghanian Blockchain community.

The Africa Blockchain Institute will continue to hold future Blockchain Summer Bootcamp series in various African cities to drive Blockchain knowledge into innovators early enough. 

Oluwaseun David ADEPOJU

Head of Research,

Africa Blockchain Institute. 

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