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In yet another milestone, Bitcoin breached US$ 29,000-mark on the second-last day of 2020. The cryptocurrency’s price has soared four times this year.
Currently, just a fraction of investors and millennials know about some of the famous cryptocurrencies such as Bitcoin, Ripple, Ethereum, etc.
However, the use the virtual currency in day-to-day life is quite rare as of now.
The crypto industry needs to maintain the current momentum for full-fledged mainstream acceptance.
Is Crypto heading towards mainstream acceptance?
This year witnessed a stunning progression in markets’ adaptation of virtual currencies. Renowned fintech platforms, from PayPal letting its users buy and sell bitcoin from 2021 to Square investing nearly US$ 50 million in the currency. There is an emergence of new cryptocurrency enthusiasts – from first-time investors to hedge funds managers – looking to gain from the digital currency’s winning spree.
A Decade-Old Crypto: Bitcoin
The largest cryptocurrency, bitcoin, began its journey a decade ago and started making headlines in 2017, steered by its astonishing rally (Wall Street analysts called it a bubble). After a massive fall, this giant virtual coin is trading at its life-time high in 2020, forcing investors to think about its potency in coming times.
Fintech firms have already started outlining their bid for cryptocurrencies as there is a huge market for digital payments still to be covered. And through blockchain-backed coins, we may see massive disruption in online payments in 2021.
@Kalkine Image
Cryptocurrency Competitors
In 2020, tech giant Facebook also jumped into the crypto race and moved forward with a virtual currency plan – Diem (formerly known as Libra).
Central banks and the Bank for International Settlements (BIS) are brainstorming to bring a Central Bank Digital Currency (CBDC). These central banks are also examining CBDC’s coexistence with cash in an adaptable and ever-evolving digital payment system.
Risk For Investors: Is It A Bubble Growth?
Meanwhile, a million-dollar-question still remains on investors mind – is the latest crypto rally, really a growth or a bubble?
Past experiences show crypto investors tend to ignore issues like ambiguity and potential frauds inclined to it. For market regulators, these are serious issues that need to be rectified. Consequently, stock exchanges are still exploring the legalities of cryptocurrencies.
Almost every stock bubble has a famous narrative of someone arguing, right at the top, that a collapse is impractical. We should not forget that the first bitcoin bubble emerged in late 2017, and it popped in early 2018 and tumbled 65 per cent, led by a large sell-off of cryptocurrencies.
