Crypto has had a strong year so far. As of November 9, 2020, Bitcoin is up over 114 percent YTD and Ethereum has risen more than 250 percent. There is much to suggest that the end of the year and 2021 will also look promising for cryptocurrencies.
Crypto currencies has had a strong year so far. As of November 9 2020, Bitcoin is up over 114 percent YTD and Ethereum has risen more than 250 percent. There is much to suggest that the end of the year and 2021 will also look promising for cryptocurrencies.
Something that speaks for a greater inflow of capital to cryptocurrencies is that the pandemic has left deep holes in many countries' economies that are covered with printed money, which has led to more and more people fleeing classic fiat currencies in which no future is seen. The factor is that more and more companies are offering solutions that make it possible to pay using, for example, Bitcoin. Paypal is one such example, and not a small one either, when the implementation in early 2021 is complete, it means that almost 350 million people will have access to buy things from 26 million sellers and pay with Bitcoin.
However, there are even more things that suggest that it's time to see the new All Time Highs in Bitcoin (which usually leads to many other cryptocurrencies coming along).
In May 2020, a so-called halving took place, which means that the reward for miners who calculate transactions was halved. This usually, in a few months' time, leads to the price starting to rise because the cost of making the transactions should be in line with or below the reward that the miner receives per transaction. The last time a halving took place, in July 2016, it took a few months before the price pulled away from below USD 1,000 up to over USD 19,000 in December 2017 before the price fell almost as drastically as it rose.
In addition to companies such as PayPal's implementation of Bitcoin and other digital currencies as means of payment in their solutions and Bitcoin's own price cycle which usually follows after a halving, other important things are also happening that will accelerate the use of both Bitcoin and other cryptocurrencies.
In a monetary policy climate where we have printed fiat money to cover budget deficits created by the pandemic we are still living in, more and more people are choosing to seek alternative "money". Development will mainly be driven by countries such as Argentina, where the Argentine peso has been devalued by more than 50% against the US dollar. At present, residents are not allowed to buy more than a number of US dollars per month, which means that more and more people are being lured into crypto to protect the capital they have today. This has also led to employers today offering to either pay wages in USD for those who have US bank accounts, or for those who do not have it, in crypto, so that the employee can then choose which currency he wants to exchange money over to .
As the uncertainty for fiat grows, so does the need for an alternative. At the same time, it may be time for Bitcoin to take a step towards higher exchange rates, which will attract even more people to choose crypto over state money. The situation has rarely looked better for those who are interested in the means of payment of the future.
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