Bitcoin Predictions for 2021 – What You Should Consider

Bitcoin has continued to grow in popularity this year among investors and in popular culture.

In 2021, the price of this cryptocurrency reached the highest it ever has.

In fact, its price rose by 50% in only a matter of weeks.

In addition to that, more popular companies are accepting Bitcoin as payment for their products and services.

Therefore, there’s a lot of attention paid not only to Bitcoin but the crypto industry as a whole.

With that said, there is still some uncertainty about the direction Bitcoin will take for the rest of the year.

It could reach even high prices until the end of this year.

However, it could potentially be on the brink of collapse.

So, here are some Bitcoin predictions for 2021.

However, considering the volatility of the crypto market, there’s no way to guarantee to know what to expect for sure.

With that said, let’s delve deeper into this topic.

Expect a Desire for Cryptocurrency Regulation

Lawmakers in Washington DC and globally are attempting to regulate crypto by establishing laws to make crypto safer for investors and a harder target for cybercrime.

In addition to that, US Senators have debated over-regulation to support tax reporting measures for cryptocurrency.

There are certainly some challenges with attempting to regulate Bitcoin and other cryptos.

This is because some agencies may have jurisdiction to oversee everything, but some may not.

Moreover, this will also differ from one state to the other.

Possible Effect of Regulation on Investors

Regulation could enable the IRS to determine cases of tax evasion more readily with regard to crypto.

That said, investors should keep records of all capital losses on their crypto assets.

On the other hand, new regulatory rules may make it easier for investors to effectively report their crypto transactions as well.

In that case, every exchange must issue a 1099-B tax form that includes cost basis information to the investor.

Regulation of crypto can also potentially affect the crypto prices in markets that are already incredibly volatile.

Investing experts consistently recommend investors keep all crypto investments to 5% or less of their total portfolio because of the high market volatility.

At the same time, they shouldn’t invest any amount that they can’t afford to lose.

However, if regulation is done smartly, it could be possibly beneficial for all investors because it will help users have more confidence in investing in crypto.

Short-Term Volatility and Long-Term Growth

In April 2021, the price of Bitcoin was $60,000—an all-time high point.

However, by July, the price became half of that.

Only weeks later, the price grew again, reaching $50,000 at the time this was published.

Therefore, there is undeniably high market volatility with significant fluctuations in price.

However, the price continues to grow.

What this could indicate for Bitcoin predictions for 2021 is that the volatility is only short-term, and the price growth is long-term.

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What Short-Term Volatility Could Mean to Investors

The short-term volatility is an indication for investors to play a long and steady game.

So, as an investor, you shouldn’t worry about short-term changes if you’re investing in Bitcoin for long-term growth and profit.

In that case, it’s best for you not to react rashly every time there’s a swing in the price.

Instead, you should forget about your crypto investment and hold onto it as the price continues to grow over time. You can then decide what to do it with when you feel like it reaches a high enough price.

More Companies are Accepting Bitcoin as Payments

Another important one of our Bitcoin predictions for 2021 is that many major companies are accepting Bitcoin and other types of cryptocurrencies as payment for their products and/or services.

Moreover, companies are also more interested in Blockchain this year than they ever have before.

Recently, AMC announced that it would accept Bitcoin as payment by the end of 2021.

In addition to that, Fintech companies such as Square and PayPal have also shown an interest in crypto by allowing their users to purchase Bitcoin and other types of cryptocurrencies on their platforms.

Tesla had also allowed customers to purchase their products with Bitcoin.

However, the decision was reversed due to some considerations on the impact of that decision on the environment.

That said, the company holds billions in cryptocurrency assets, and experts have predicted that the company will buy more assets in crypto.

In their Bitcoin predictions for 2021, experts have argued that there is likely to be a greater acceptance of Bitcoin and other cryptocurrencies by other companies, including global ones.

Thus, there is a high chance of a chain reaction of more acceptance of crypto as payments as institutions choose them. It showcases that Bitcoin can increase its credibility.

There have also been some reports that Walmart is looking for a crypto expert to manage its blockchain strategy.

Possible Effects of Institutional Adoption on Investors

Investing in Bitcoin could then have more use on an everyday basis if users can spend their cryptocurrency on making purchases at retailers over time.

The result of that would mean changes in the prices of crypto.

It’s still far too early to make any confident statements about the prices, but if Bitcoin does begin to be used as payment, there will be a higher demand for it.

Therefore, the prices will go up, and long-term Bitcoin investors can benefit from their investment.

Last Few Words

Bitcoin predictions for 2021 also provide insight into the crypto market as a whole because Bitcoin has about 47% of the market share.

So, all things considered, there is a positive outlook on the future of Bitcoin.

However, with a volatile market, nothing can be said in complete confidence.

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