In cryptocurrency, future predictions are hard to make. The cryptocurrency market was on the rise for some time before sharply turning south. So, what is the future of cryptocurrency? This article will discuss what the future might look like for cryptocurrencies such as Bitcoin and Ethereum. We’ll also explore what blockchain technology may have in store for 2021 and beyond.
Bitcoin has been fluctuating in value for a while. It started the year at around $30,000 before reaching an all-time high of $64,000 and coming back down to $30,000 in July. However, the price of Ethereum has been on a steady rise and is up over 100% from the start of 2021. So how high can cryptocurrency prices go?
Bitcoin and Ethereum prices at the end of 2021 are difficult to predict. Bitcoin could be worth anywhere between $20,000 and $100,000. Ethereum could be worth around $2,000 or up to $5,000.
What challenges cryptocurrencies are facing in 2021
Ethereum is facing some challenges in terms of scalability and governance. The future of Ethereum will depend on what happens with Casper, Sharding, Plasma, Raiden, and what they can do for scaling.
Bitcoin is facing regulatory challenges. At the moment, regulators are uncertain what they can do to cryptocurrencies because they are still trying to understand what they are and how they work. The SEC has said that cryptocurrency does not have the characteristics of a security, but it still needs to be regulated as one. On the other hand, El Salvador has moved to recognize Bitcoin as legal tender.
However, Bitcoin will need to scale for it to be able to support the increased demand. Currently, transactions are taking too long, and there is a high cost associated with Bitcoin transactions. SegWit2x was designed to solve these issues but failed to gain consensus due to political divides. We cannot answer “what is the future of cryptocurrency?” without answering “what is the future of Bitcoin?”.
Why cryptocurrency future predictions are worthless
In cryptocurrency, future predictions are anyone’s guess. This space is moving so fast that even a month feels like an eternity. Cryptocurrencies and blockchain technology will definitely remain a driver for innovation in finance. Regardless of what happens, there is no denying that the cryptocurrency market has changed the way we think about money and investments. The internet revolutionised how we acquire knowledge and data, and blockchain will do the same for money and transactions.
While the internet enabled us to access a plethora of information, blockchain has created an unfathomable number of transparent transactions that are open not only for financial institutions such as banks but also for individuals. However, blockchain technology is limited in what it can currently do in terms of scaling and mass adoption.
Conclusion
The future of cryptocurrency is difficult to predict. When considering what cryptocurrencies may be worth at the end of 2021 or what challenges they will face, scalability and regulation are two key factors.