Blockchain Experts’ Predictions for the Crypto Market Vary Significantly
The crypto market undoubtedly saw intense trading action in 2020. As the new year rolls in, market experts have significantly different forecasts for the future of digital currencies. During the last week of December 2020, Bitcoin reached new all-time highs that exceeded twenty thousand. With approximately twenty-nine major operating companies holding Bitcoin reserves, the Bitcoin Treasuries list has impressively surpassed thirty billion dollars. The astonishing performance of Bitcoin and other digital currencies has caused an influx of crypto trading, which has infiltrated new markets and sectors.
Will Bitcoin Continue to Thrive in 2021?
Several crypto experts predict Bitcoin’s upward trajectory to continue into 2021, but other market experts remain skeptical. COVID-19 lockdowns caused economic instability on a global scale, which surprisingly influenced the success of cryptocurrencies. During 2020, Bitcoin successfully quadrupled its market value. The Securities and Exchange Commission has launched a lawsuit against XRP’s developer, Ripple Labs. The lawsuit’s virtual hearing is set for February 22, 2021, but XRP’s value has already taken a hit because of the legal proceedings.
The current lawsuit against Ripple Labs has diminished XRP’s market value, which has increased Bitcoin’s value in return. Ethereum, Litecoin, and XRP experienced significant market gains in 2020, but no cryptocurrency’s success compares to Bitcoin’s gains. A robust crypto market combined with XRP being delisted on popular crypto trading platforms has driven up many cryptocurrency’s values.
What Could Harm a Booming Crypto Market?
The 2020 COVID-19 pandemic enhanced the success and sustainability of Bitcoin and other digital currencies. The thing that makes digital currencies so prevalent in today’s unprecedented economic climate is that third parties don’t monitor blockchain ledgers. Bitcoin uses the decentralized blockchain platform for financial transactions that remain outside the reach of banking intuitions. Crypto experts have suggested that the Securities and Exchange Commission’s lawsuit is just the beginning of legal action by outside parties.
If digital currencies must operate inside a centralized platform with regulations, the crypto market will crumble from its current status. Analytic data suggests that outside interference regarding cryptocurrency exchanges will damage the market’s infrastructure and damage its integrity. Blockchain and crypto traders remain hopeful that outside interference won’t eliminate the market’s anonymity or value.
Financial Crimes Enforcement Network Suggests New Regulations for Crypto Exchanges
The Financial Crimes Enforcement Network has proposed new regulations for crypto exchange platforms. Under the newly suggested guidelines, crypto platforms will be required to collect personal information about account holders. Cryptocurrency holdings on foreign exchange platforms will be classified as reportable accounts if the proposed regulations are enforced. Financial strategists claim that crypto exchanges won’t face further taxation, but there isn’t much evidence to back these claims.
The FinCEN’s regulations would require crypto companies operating outside of the United States to comply with the Bank Secrecy Act. Before the end of President Trump’s term in the White House, FinCEN hopes to put new rules in place for crypto market platforms. FinCEN’s and SEC’s sudden actions have caused crypto experts to disagree about future predictions relating to cryptocurrency trading’s expectations in 2021. Bitcoin continually increases in value and is not expected to stop any time soon.