The future of cryptocurrency: 5 experts’ predictions after a “breakthrough” in 2021. Cryptocurrency has had a banner year in 2021. But where do we go from here?
In April and October, we saw Bitcoin reach new all-time high prices. Regulatory conversations with the potential to have a significant impact on the sector. And increased institutional buy-in from major corporations. Meanwhile, interest in cryptocurrency has soared this year. Making it a popular issue not only among investors but also in popular culture. The future is owing to everyone from long-time investors like Elon Musk to that kid from your high school on Facebook.
Dave Abner, head of global development at Gemini, a renowned cryptocurrency exchange. Describes 2021 as a “breakthrough” in many aspects. “[The crypto business] is receiving a great deal of interest and attention.”
However, the sector is still in its early stages and is continually changing. It’s tough to forecast where things will go in the long run. But experts will be watching issues like regulation and institutional acceptance of crypto payments. In the next months to get a clearer feel of the future market.
While it’s tough to make exact predictions. We asked five experts what they’re watching in the crypto world for the future remainder of 2021:
Expect more talk about cryptocurrency regulation. Bitcoin is a digital money that is gaining popularity among investors and hackers alike.
In the Americas, Jeffrey Wang, CEO of Amber Group, a Canadian crypto finance startup, thinks regulation is a major concern. “We appreciate unambiguous regulation.”
China declared all cryptocurrency transactions illegal in September. Thereby halting all crypto-related operations within Chinese borders. Americans have more questions. The Federal Reserve’s Jerome Powell has stated that he has “no intention” of banning cryptocurrency in the US. While SEC Chairman Gary Gensler has repeatedly stated his agency’s and the CFTC’s roles in overseeing the industry.
Gensler has stated that investors are “likely to lose” if no new regulations are implemented. Also, the IRS has a vested interest in investors knowing how to report virtual money on their taxes.
Regulation, like most things in crypto, has its challenges. “Different agencies may or may not have jurisdiction,” Wang explains. “And it varies by state.”
Uncertainty among US corporations and investors is currently a “significant obstacle for cryptocurrency,” according to Wang.
What new regulation could mean for investors
Recent proposed laws may make it easier for the IRS to detect crypto tax avoidance. While investors should already keep track of their capital gains and losses. In addition, the new guidelines may help investors correctly disclose crypto transactions.
Why? “Exchanges will have to provide 1099-B tax forms to investors if the bill passes,” Shehan Chandrasekera. Also a CPA, tax strategy lead at CoinTracker.io, told NextAdvisor. A crypto tax filing load will be much reduced.
Cryptocurrency prices are affected by regulatory statements in tumultuous markets. Due to market volatility, experts advise limiting cryptocurrency investments. Under 5% of your whole portfolio and never investing money you can’t afford to lose.
Finally, many analysts believe regulation benefits the industry. CoinFlip CEO and cofounder Ben Weiss: “Sensible regulation benefits everyone.” “It boosts trust in crypto, but I think we need to take our time and get it right.”
Crypto ETF Approval
On this front, the New York Stock Exchange recently listed the first Bitcoin ETF. This is a new and more traditional approach to invest in crypto. The BITO Bitcoin ETF allows investors to acquire cryptocurrency straight from traditional brokerages like Fidelity or Vanguard.
“We do it in the equity market, we do it in the bond market.” Gensler said last summer at the Aspen Security Forum.
Some argue that the BITO ETF is insufficient because it is tied to Bitcoin but does not hold it directly. Instead, it holds Bitcoin futures. Experts suggest that while Bitcoin futures monitor general crypto trends. They may not accurately track Bitcoin’s price. For now, investors must wait for a Bitcoin ETF.
The SEC has considered ETF clearance several times in recent years, but BITO is the first.