Today, cryptocurrencies are recognized as one of the most popular areas for investment, and the popularity of these cryptocurrencies has also affected ordinary people in society. Most people who are interested in investing in this field are curious to know about the future of these currencies. In this article, we have reviewed the predictions of financial market experts and will help you to become more aware by providing practical tips in the field of risk management.
The general structure of cryptocurrency and the opinion of experts about its capabilities
The development of cryptocurrencies has surprised investors in recent years, and today there are many people who earn millions by investing in cryptocurrencies. Analysts believe that the profitability of stock companies is negligible compared to cryptocurrencies. According to Mohammad Hosseini, a trader and financial markets analyst, investing in the cryptocurrency market is the best option for people who pursue significant profits. There are currently more than 500 types of cryptocurrencies on the market, each with its own structure and capabilities, making it difficult for investors to make decisions. As mentioned, cryptocurrencies are very profitable, but at the same time their dump can cause significant losses for you.
How can potential losses in financial markets be prevented?
If you have been following the news in this area, you certainly know that price fluctuations and instability are recognized as one of the main features of the cryptocurrency market. Therefore, familiarity with topics such as risk control and management methods will have a significant impact on your profitability.
Bitcoin is one of the most popular options on the market, but it cannot be considered the best option for investment, because buying other cryptocurrencies such as Ethereum, Ripple, Litecoin, etc. can be very profitable for you.
According to Mohammad Hosseini, emotional performance in such markets has irreparable consequences. In general, experience has shown that investors in such markets are successful, if they properly assess all aspects and being able to manage their emotions in any situation. In addition, people can develop their analytical power by following the news on various social networks. The more information you have about the market and the factors influencing the price of cryptocurrencies, you understand the situation better and make better decisions. Sites such as TradingView, for example, provide users with a wealth of useful information by providing specialized tools and displaying price charts. In addition, you can easily follow the analysis of world-renowned investors shared on this platform.
However, keep in mind that you need to define your goal and strategy before any action. For example, short-term and long-term investments can be mentioned. Risk is generally an integral part of investing in financial markets, so be very cautious to avoid potential losses. In general, most analysts, including Mohammad Hosseini, point to the rally and unexpected trend of cryptocurrencies in 2021.
The popularity and promotion of cryptocurrencies is increasing continuously, and some believe that the main reason for this is the weaknesses that already exist in the world’s traditional financial system. Users of this new network consider cryptocurrencies as a viable alternative, and many believe that cryptocurrencies such as Bitcoin, Ethereum, etc. will surpasses government agencies and eliminate corruption altogether. Meanwhile, some government finance officials claim that cryptocurrencies will be banned in the future, but the decentralized structure of cryptocurrencies has been designed to reduce the likelihood of such event.
Although 2020 caused problems for most countries in the world due to the global economic crisis caused by the widespread outbreak of Corona disease, it was a year of significant growth for cryptocurrencies.
The problems caused by the pandemic Corona in the United States paved the way for the growth of cryptocurrencies, especially bitcoin, which was mainly due to the entry of large financial institutions into the cryptocurrencies market. These institutions have considered investing in the cryptocurrencies market as a viable alternative to traditional markets that are resilient to significant economic threats.
The price of bitcoin was around $ 7,200 at the beginning of 2020, and to date, at the end of 2020, it has increased by about 267% and reached above the level of $ 26,600.
Ethereum was valued at $ 132 at the beginning of 2020, while today, with a 446% increase, the price of each unit has reached above $ 720.
One of the reasons for optimism about the future of cryptocurrencies, especially bitcoin, lies in the independence of these currencies from governments. This shows that it is difficult to predict the future of cryptocurrencies.
Considering the bitcoin halving event in May this year, which has halved the supply by halving the bitcoin mining bonus, the demand has outpaced the supply of this cryptocurrency, and as a result, the bitcoin price will continue to rise in the coming years. The special year of 2021 will continue and, naturally, the increase in the price of bitcoin will affect other currencies as well.
However, many Bloomberg analysts have predicted that the price of bitcoin will reach $ 100,000.
Currently, there are a large number of fiat legal exchanges in cryptocurrency in different countries. In addition, the number of accounts in these exchanges has increased from 5 million in 2016 to more than 100 million in 2020, and the number of these accounts is expected to increase steadily in the coming years.
Another feature of cryptocurrencies that will have a significant impact on the economies of people and communities in the future will be the facilitation of the bitcoin buying process for small investors.
Obviously, another influential factor in this sector is large technology companies such as PayPal and Squer which make it easy for people to buy Bitcoin and other digital assets. The two companies alone have purchased 100 percent of the new mined bitcoins to meet the demand of their American customers. If several of these platforms are serviced by international clients by next year, their impact will be astounding.
What has made citizens pay more attention to buying bitcoins is the financial deterrent policies pursued by many governments. Policies ranging from inadequate financial facilities to preventing citizens from withdrawing money have discouraged them from traditional methods of transferring money. 2020 saw a record increase in the number of bitcoin wallets, and it is not surprising that this record will be broken again in 2021.
As some countries, from the Bahamas to the United Kingdom, made headlines in 2020 with their initiatives on national cryptocurrencies, other large countries, which control 85% of the world economy, can also be expected to announce their plans in this regard soon.
However, all eyes will be on China and Japan in 2021, which are seriously pursuing the development and production of their cryptocurrencies and paving the way for the future of money. The Chinese are working on digital Yuan. In the final pilot phase of the project, more than 2 billion Yuan (equivalent to $ 300 million) was transferred through 4 million transactions using digital Yuan.
As mentioned earlier, we will see big events in 2021. One of these efforts, among others, is the massive Japanese program. As reported by Reuters, in 2021, more than 30 major Japanese companies will begin testing a private and public cryptocurrency in one of the world’s most money-loving countries.
Another prediction for the world of cryptocurrencies in the coming years is that the banking world will begin to use and produce cryptocurrencies on a large scale. So far, the banking world has been researching and preparing block-chain-based services and crypto-currencies. Our prediction for 2021 is that there will be at least one major success that will affect real life, and this will be a change in the world economy, since it creates a sense of FOMO (fear of being irritated by others) among countries, central banks, and big financial institutions.
Bitcoin and other cryptocurrencies have emerged as new asset classes that have yielded tremendous returns over the past decade. Several new developments, such as the increase in institutional demand, the approval of the ETF fund, and the popularity of fixed currencies, indicate a constructive and continuous trend. Considering the current trend of cryptocurrencies, in general, it can be said that in 2021, the positive trend of cryptocurrencies will continue as well. With the increasing use of these currencies in everyday life and in various industries, the demand for cryptocurrencies, especially Bitcoin and Ethereum, which are the leaders in this field, is expected to increase significantly in 2021, and these factors will ultimately increase the price of these digital assets. 2020 was an exciting year for cryptography, and 2021 is making it even more exciting.
In the not-too-distant future, cryptocurrencies such as Bitcoin may completely replace today’s currency. See the link below for more information: hoseinifinance.com