Bitcoin in 2021: What awaits us?
In this special article, we embark on the reckless feat of predicting the future. Of course, the chances of getting it right are minimal. But let's play the riddles for a bit. And if we got some things right by chance, well, it was by accident. The future is impossible to predict. What we can actually do is make assumptions about the future with what little information we have at hand. We don't know much, but we know something. And on those probabilities we can make a bet.
***Actually, we won't talk about the fu
ture. But let's pretend so. We speak of the future with poetic license. The future as an expectation. Bitcoin in 2021. What awaits us?
Well, it is possible. In fact, it is highly likely, if the current enthusiasm continues for the rest of the year. Of course we would need more ads. I mean more institutional purchases, more adoption, and more FOMO. Passing an EFT would be glory. Any instrument that more effectively channels the entry of institutional capital into the world of cryptocurrencies will help the price boom.
On the other hand, a possible setback could come from the regulatory field in the United States and Europe. For now, that danger is hypothetical, because there is nothing in particular that represents a specific threat. A giant must fall to create the illusion that inequality is a problem that worries politicians. Anyway, for now, Bitcoin is not on the scapegoat list.
The truth is that everything seems to indicate that 2021 will basically be an extension of 2020. But, during the first months of 2021, the situation will look a lot like the last months of 2020.
The coronavirus accelerated several processes and that will continue in 2021. The deglobalization of the world, the digitization of the world, and the deepening of the rivalry between China and the United States.
The aid in this sense has been very timid, due to the blockade of the Republicans due to a matter of doctrine. At the moment, a new aid package is under discussion that will put some liquidity in the economy, but, due to the blockade of the Republicans, more than a significant stimulus it is a small relief that will not have much effect. Of course, next year's packages may be a bit more generous, Republicans notwithstanding. Now Joe Biden's administration.
In the monetary field, a change of administration does not affect much the policies of the Federal Reserve. But I am afraid we will not be facing a very dramatic change, because Biden is taking the White House with a Senate controlled by the Republicans. I mean, the Republicans will put a stop to everything. Beyond Biden's promises to work with both parties, in a country as polarized as the United States, this is easier said than done.
Obviously, Joe Biden is not the socialist that Trump presented for reasons of electoral strategy. Joe Biden is not a newcomer. In Biden's case, the danger, in my opinion, is not a radical shift to the left. I think the danger here is having an administration rich in words and poor in actions.
Biden's foundation is antitrumps. Does Biden have what it takes? Do you have that strength? Or will it become mere talk?
For ideological reasons, libertarian-cut bitcoiners are crazy to see inflation through the roof to say they were right. What you want is to have inflation to say that the Federal Reserve made a mistake and the fiat system failed. Hence, Bitcoin is a better option. But falling into this is absurd. I'd say pathetic.
### What's the point? The best thing that can happen to us right now is a picture of low inflation, high unemployment, and lots of monetary stimuli. Because that will bring enough liquidity so that the price of Bitcoin can exceed $ 50K this year.
If inflation, on the contrary, shoots up, the Federal Reserve will automatically be forced to withdraw liquidity from the system with all the instruments at its disposal. In other words, you will have no choice but to strengthen the dollar. And that would mean the collapse of the financial markets. In other words, Bitcoin could not reach $ 50k with the same ease.Frankly, Bitcoin does very well with its alignment to the tech sector in this story. Libertarians' desire to see inflation to say they were right is quite childish. If inflation gets out of control, that doesn't mean the system failed. On the contrary, it means that the system is working perfectly. Full employment has been achieved and it is time to withdraw liquidity by raising interest rates.
Bitcoin is coming of age**
Skeptics towards bitcoin have repeatedly pointed to the cryptocurrency's inherent lack of value as one of its biggest weaknesses. The price of bitcoin would have to be multiplied by five, to 119,000 euros per coin, to equal the global valuation of 469 billion dollars of private gold wealth in gold bars, coins or exchange-traded funds.
2020 was a successful year for bitcoin, the world's largest cryptocurrency. Its value exceeded 30,265 euros during the first week of 2021, quadrupling its value compared to 2020. In recent weeks, the company Grayscale Bitcoin Trust earned more than 2.45 billion euros, according to a note published this Tuesday by the bank of JPMorgan investment. "The competition of bitcoin and gold has already started in our minds"
Will that happen in 2021? I do not think so. In 2022-2023? Maybe.
