The price of Bitcoin will remain volatile in 2021, but it will be a great year overall for the digital currency if the current trend holds out.
This is according to Venox founder and cryptocurrency expert Simon Dingle, who told MyBroadband he expects a similar trend to the one seen in 2017 with regards to the hype and speculative valuation around Bitcoin and other cryptocurrencies.
Dingle is the author of In Math We Trust and the founder of cryptocurrency startup Venox, a private digital asset custody and execution company focused on the South African market.
He told MyBroadband that he does not like providing price predictions for Bitcoin due to its volatility. However, he said that if the economic climate remains the same, 2021 will be a very good year for digital assets.
“2021 is going to be a good year for Bitcoin, all things being equal,” Dingle said.
This is presuming the world begins to get a handle on the COVID-19 pandemic and the Biden presidency settles into its regime without too much drama, he said.
“The next few months are going to be very volatile,” he said. “In the latter half of the year, we will expect there to be much more hype, this time spurred by decentralised finance interest from the market.”
He likened this projection to the ICO hype which caused a meteoric rise in the price of all cryptocurrencies in 2017.
“It will be very similar to the pattern in 2017, but this time the timing is of course very different,” he said.
“In 2017, we saw rallying in the beginning, volatility, and then fireworks toward the end of the year.”
A rise in hype and demand for Bitcoin will result in increased pricing due to the provably scarce nature of the cryptocurrency, he said.
Dingle noted that this year’s Bitcoin value growth will be driven by interest from institutional investors, a projection echoed by South African cryptocurrency exchange Luno.
Luno Africa general manager Marius Reitz also said that Bitcoin will repeat the trends of previous years, steadily improving its price as mainstream interest grows.
“Looking back at our predictions from last year – the Bitcoin halving happened without a hitch and the industry matured as institutional investors entered the market,” Reitz said.
“2020 was a proper stress test with Bitcoin hitting a low of around $5,000 in March and a high of $28,000.”
“The new year is following the same trend with the price already reaching the $40,000 level,” he said.
Luno saw record volumes on its exchange in the last few weeks of 2020, and it expects adoption to continue growing this year alongside the increasing adoption of digital assets.
Reitz also said that major players are beginning to become involved with cryptocurrency, with an increasing number of investors entering the market.
“While we are seeing large price movements, we expect that mainstream adoption will grow in 2021,” Reitz said. “Major players are increasing their investment and interest in cryptocurrencies.”
“In addition, the retail market is set to pick up on the back of booming crypto assets, greater media attention, and easy access for anyone.”
“With each bull run, more investors enter the market for speculative purposes, thus growing the user base and moving closer to a critical mass of users for the crypto payments and other use cases to develop,” he said.