Future of Crptocurrency

What is the future of cryptocurrency 2021 and beyond currently right at this moment?

The bitcoin value is at twenty-six thousand eight hundred and forty-three point ninety US dollars whereas either is at 731.19 us dollars that's pretty freaking high don't you think despite the economic damage caused by covid 19 cryptocurrencies have continued to surge in the past couple of months. At the beginning of this year, ether was at 130.27$ and it had more than doubled whereas bitcoin had risen from 7 000 to 26 000$. Bitcoin has hit an all-time high but the question is should we get excited today we are going to talk about the future of cryptocurrency what can we expect in the upcoming year and the years ahead of the good the bad and all that is in between.

History

The fact of the matter is that this is not the first time bitcoin or other cryptocurrencies have hit a sudden spike when it comes to bitcoin the same thing happened back in 2017 when the currency jumped from 909 us dollars. From the beginning of the year to 1900 us dollars at the end of the year, Optimus became excited to back then as well but then 2018 bought a disappointingly huge crash. The cryptocurrency fell back to 3 800 u.s dollars letting down everyone who had rushed to invest in it took one and a half years for bitcoin to rise once again.

Predictions for the Future

Will bitcoin crash? Once more probably not the spike in 2017 was caused by individual investors who had rushed to invest in it this time the situation is different because slowly and surely institutions have started to embrace bitcoin as well not only that there has been a wide-scale promotion of bitcoin and investing in bitcoin at institutional levels some of these institutions are fidelity investments. JPMorgan and PayPal in August of 2020 fidelity launched their first-ever bitcoin fund for their wealthy investors this fund was opened under the unit, fidelity digital unit and the minimum investment was 100 000 u.s dollars this may seem like a crazily high number to us but it is nothing for fidelity's investors in December.

A few days ago fidelity CEO came forward and admitted that their fund has been incredibly successful with fidelity making so much progress more investment firms are sure to follow.

JPMorgan is one of them and they too have created a crypto business unit with 100 staffers analysts in their company have suggested that it's a great alternative investment to gold and that they have predicted that the value will double or triple considering the current trends. 

PayPal's also jumped on the bandwagon and they have also announced that users will be allowed to buy and sell in bitcoin Ethereum and other virtual currencies using their PayPal accounts. 

On top of that many big companies and firms are not just supporting but they have also started stockpiling millions of dollars worth of bitcoin this will work towards slowly and gradually stabilizing the currency and it'll act as a motivation for individual investors to hold on and keep trading along with institutional acceptance many great investors and wall street hedge fund guys have started to accept bitcoin some going as far as to suggest that it will be the anchor that can hold the economy down against the currency devaluation.

The risks but does this mean that all is good and there are only rainbows and unicorns ahead well not really while optimistic analysts have hopes for a brighter future, other analysts see that there are far too many risks that just cannot be ignored what are they the first and foremost is that even though,  while bitcoin may seem relatively more stable it's still very volatile. According to statistics, bitcoin has a 3.51 volatility index in comparison to gold's volatility index is just 1.2 in simple words this means that the price of bitcoin keeps varying and it is a risky asset to hold other cryptocurrencies that have an even higher volatility rate because there are fewer people investing in them, for example, Ethereum is at 9.41 and that means it's a riskier asset on top of that cryptocurrencies also face some serious security issues. The bitcoin wallets are considered vulnerable to hackers and there is a potential for theft. A study reported that they found weak spots in the hardware wallets even the most encrypted wallets have loopholes that make it easier for hackers to exploit them that simply is not good news for investors an even bigger problem of threat is a 51 attack this means that one pool of miners gets 50% control of the mining power of the blockchain network with this power, they could start mining invalid blocks or they might start double-spending and hence weaken the system the whole blockchain system is based on the fact that the hashing power does not fall into the hands of any one person or any one group which is why this is so dangerous while bitcoin is at a lower risk to a 51 attack because the hashing power is much greater than other cryptocurrencies that have less hashing power may not be as secure and they are at risk it has already happened in the past in January 2019 on the altcoin Ethereum classic leading to a loss of 40 000, etc yikes we have now presented both sides of the coin.

Thank you guys for being with me till the end of the blog. See you in the next blog stay blessed. 

JazakALLAH!