San Francisco, California. February 2, 2021
In 2017, the price of bitcoin broke $20,000. However, there wasn’t much time to celebrate because the price quickly fell and by December 2018 it was at $4,000.
With bitcoin ending 2020 at close to $30,000, the analysts at Uphold.Com believe that such a dramatic decline is likely not to happen again. They advocate people to buy bitcoin. That requires a bitcoin wallet. Institutional investors are investing in bitcoin like never before. 2021 feels a lot different. Here are the 5 big predictions for 2021.
Bitcoin Will Threaten Gold & Other Assets
In 2020, bitcoin stole market share away from gold. For a long time, gold has been considered the ultimate asset. It has been used as a store of value. However, this looks to change with the dominance of bitcoin. Many people want to buy XRP.
Bitcoin has changed the investment landscape. It has become the focus of attention. People are moving away from traditional assets such as stocks and real estate in favor of cryptocurrencies.
Studies show that most millennials consider bitcoin as a safe haven asset. The fact that the supply of bitcoin is limited makes it appealing. On the other hand, fiat currency and stocks can be created out of thin air.
Uphold offers investors an opportunity to invest in cryptocurrencies as well as traditional assets such as precious metals and stocks. The rule of thumb when it comes to investing is that a person should not have all their eggs in one basket. It is advisable to diversify the portfolio as much as possible.
Big Banks Will Start Focusing on Bitcoin
For a long time, big banks have treated bitcoin with skepticism. They have warned people against investing in bitcoin with the claim that it is an asset that doesn’t have any real backing. However, Wall Street is starting to be more accepting to the idea of bitcoin. Analysts at Citibank even predicted that the price of bitcoin will shoot above $300,000 by the end of December 2021.
Central banks all over the world are starting to make their own digital currencies that are modeled around the idea of bitcoin. Blockchain has found wide acceptance in many industries.
Regulation of bitcoin will be a hot topic in 2021. If bitcoin gets bigger, the American government might be tempted to introduce new curbs. Already, regulation has been passed in many countries to protect investors.
Bitcoin investors who live in the U.K. and the U.S. should start putting their tax affairs in order. The Internal Revenue Service (IRS) is starting to prosecute people who don’t declare their bitcoin holdings. Selling bitcoin at higher than the purchase price is a taxable event that requires paying capital gains tax.
Bitcoin Might Double Again
$60,000 is a realistic price target for bitcoin this year. This will result in a market capitalization of over $1 trillion.
Uphold is a cryptocurrency exchange that enables people to buy and sell bitcoin. Other assets are also offered including precious metals and stocks. For more information, visit uphold.com.