Soucoin collation | Bitcoin in 2021: looking to the future

Although the cake is getting bigger and bigger, the competition will only become more intense from now on.

Bitcoin

2020 is a turbulent year for the cryptocurrency field, but for Bitcoin and the more promising cryptocurrency world, what will happen in the next year? Let’s discuss it together.

Brief overview

1. The big names in the crypto industry including Zhao Changpeng and Sergey Nazarov shared their views on cryptocurrency in the coming year.

2. The forecast includes that the price of Bitcoin will rise to 100,000 USD and beyond, DeFi income agriculture is becoming more and more common.

3. The central bank’s digital currency is also brewing, and some predict that the government will try to ban Bitcoin.

No one can foresee what will happen in 2020. Since the 1930s, the world has never experienced a pandemic like the coronavirus, and the economy has never collapsed so severely. For cryptocurrencies, this is also an unprecedented year. With the recovery of the global market and the halving of Bitcoin rewards, the price of Bitcoin has soared and the Decentralized Finance (DeFi) industry has flourished.

Therefore, it is a difficult task to predict the challenges we face in 2021. The COVID vaccine may prevent the spread of the coronavirus, and the global economy may rebound. But again, the economy may collapse. The government’s money printing machine will not stop soon, and coins may depreciate at any time.

No one knows how these will affect Bitcoin and the wider crypto space. Nevertheless, it is worth a try. Decrypt successively interviewed industry leaders, from Binance CEO Changpeng Zhao and Chainlink co-founder Sergey Nazarov and other industry leaders to discuss what will happen in the cryptocurrency field next year?

Changpeng Zhao said: “Between payments, institutional investment, quantitative easing and the long-term economic impact of COVID, it is difficult to predict which one will be the “hottest thing” next year. If you ask me in 2016, I would say it is ICO . If you ask me in 2019, I will not talk about stable currency trading (DeFi).” This is the best guess given by the industry.

1. The price of Bitcoin will rise

This is a tricky question. Bitcoin is the lifeblood of their careers and the source of their daily lives. Which cryptocurrency leaders are willing to think it will collapse?

But several cryptocurrency CEOs have reason to believe that this number will rise next year. Philippe Bekhazi, CEO of the digital currency exchange Stablehouse, believes that “considering the interest of institutions and companies,” Bitcoin is likely to be between $50,000 and $100,000 at the end of the year.

CoreLedger CEO Johannes Schweifer predicts that the price of Bitcoin may exceed $100,000 next year. He said: “Bitcoin has shown that it can achieve more than this level of growth in less than a year, so this is possible.”

RioDeFi CEO James Anderson said that Bitcoin will continue its upward momentum, and investor sentiment in early 2021 will become more optimistic. He believes that the price of ETH will also rise, but due to the risks brought by the release of Ethereum 2.0, the long-awaited upgrade of the Ethereum blockchain will make the price of ETH more volatile.

Nangeng “NG” Zhang, CEO, founder and chairman of the American mining company Canaan, told Decrypt that the increase in hashing power in November “foreshadows a bullish momentum.” He believes that this latest gathering “looks like it will continue. By 2021, the difficulty of Bitcoin mining has increased by about 9%. He said: “Historically, the increase in difficulty levels marked the beginning of the Bitcoin bull market cycle. ”

2. Institutional investors will buy cryptocurrency and DeFi

This year, thousands of well-known investors have purchased cryptocurrencies. In the second half of 2020, the American business intelligence company Microstrategy bought $500 million in Bitcoin, and Mexico’s second richest man, Ricardo Salinas Pliego, invested 10% of his current assets Bitcoin, and MassMutual bought Bitcoin worth $100 million.

Antonio Velasquez, head of communications at Hermez Network, stated that government money printing will enable institutional investors to allocate most of their portfolio to Bitcoin and Ethereum. He said: “No one knows where the price will be, but we can guess that the continued devaluation of fiat currencies will cause most cryptocurrencies to reach all-time highs. “If the bull market breaks out completely in 2021, we are likely to see 2017 Similar to the ICO boom, large sums of money will join the carnival to buy anything with the word “DEFI”.

Sergey Nazarov, the co-founder of Chainlink, agreed. He said: “I expect that the deterioration of the global economic fundamentals and the rapidly rising inflation caused by uncontrolled money printing will push more people to adopt Bitcoin and various crypto assets.” He said, this ” The massive adoption of encrypted assets as a way of preserving personal wealth” will create a favorable environment for decentralized finance (DeFi) protocols because they provide the high yields of cryptocurrencies.

Nazarov added that DeFi income agriculture will provide an attractive alternative to high inflation and low production in the global financial system. Initially, he suggested that “young people who are suitable for crypto assets” use it, and then promote it to a wider population through existing mobile apps and money managers. Nazarov suggested that even local banks can get involved.

3. DeFi will change?

Decentralized finance (DeFi) has soared from a $1 billion industry to an industry worth more than $15 billion this year. With the influx of investors on protocols (mainly Ethereum-based decentralized exchanges (DEX), synthetic assets, and lending protocols), they began to provide profitable cryptocurrencies. But how will DeFi change in 2021?

Lucas Huang, director of Tokenlon, believes that DEXES will grow next year. Huang said: “Uniswap will still be the most popular because it can easily obtain tokens at a small market value and “has a popular brand.” But Huang doesn’t know what will happen to other DEXs, because each DEX has Focus on different types of assets, such as synthetic tokens that follow Bitcoin prices or Tesla stock prices. Huang believes that next year’s competition will produce popular and user-friendly DEXs.

Huang also believes that popular DeFi applications will launch a second-layer scaling solution, a protocol on top of the blockchain (usually Ethereum) to avoid bottlenecks caused by blockchain limitations. Huang said that Synthetix, Aave and Uniswap have announced the second-tier plan for 2021. Huang said that it is not yet clear, because all the second layers are making different trade-offs, which one will dominate.

Huang believes that Polkadot can take off because it has a parachain, which is an independent blockchain linked to the main Polkadot blockchain, similar to the sharding of Eth 2.0, and the function is similar to the second layer solution. He believes that this will not attract a large number of developers in 2021. Relying on these opportunities, the opportunity cost remains high. He said that the actual adoption of applications based on chains other than Ethereum may have to wait until after 2021,”

Kevin Chou, CEO and co-founder of Rally, believes that social tokens will rise. He said: “We may see more mainstream cryptocurrency adoption, especially among content creators, artists, and e-sports teams to attract and profit from their fan base.”

“In particular, creators are looking for ways to get rid of the independence of the central social media platform, while mature and emerging artists are looking to make up for the tour loss that may last until 2021.” He hopes to launch more social tokens, So we will see a lot of community experiments, such as video chats, tokenized gatherings, etc.

Muneeb Ali, co-founder of Blockstack, believes that, given that Bitcoin is the currency with the largest market value, DeFi will lean towards Bitcoin. He said that different projects are already looking for ways to bring more DeFi functions to the network by packaging BTC. I hope that developers will increase innovation around Bitcoin and explore new ways to build natively on top of it. ”

4. DeFi and CeFi (centralized finance) will converge

Changpeng Zhao, CEO of Binance, believes that lending agreements and revenue aggregation platforms (especially for stablecoin transactions) will continue to exist. DEXS is also very suitable for listing small and immature currencies, which provides a good verification basis for large CEX, he said; CEX refers to centralized exchanges such as Binance, Coinbase and Kraken.

“I believe we will see more product integration in the CeFi front-end. But fundamentally, DeFi and CeFi are aimed at different users. I hope both can help the industry develop.” He said. CZ believes that locking the legal payment system will promote the development of decentralized payment. He said Binance achieved this through Binance Card, and PayPal placed Bitcoin alongside legal tender. He said: “I believe this is very beneficial to the entire industry. In the next 12 months, we will see continued growth.”

BitFlyer Chief Operating Officer Joel Edgerton believes that as China prevents cryptocurrency from competing with its CBDC, CeFi will move from Asia to the United States, and the United States will crack down on undocumented exchanges. “Institutional funds are expanding their market share, and they will definitely prefer the regulated CeFi exchange. He said this will speed up the pace of entering the United States.

He said that with the disappearance of CeFi, Asia will continue to dominate DeFi. But he believes that the next big crypto companies will be “HyFi” or hybrid financial companies that can figure out how to bring DeFi innovations into the regulated market. ”

5. Stable coins will take off, but not what you think

CoreLedger CEO Johannes Schweifer believes that although “the cryptocurrency issued by any country will not be like Bitcoin”, we will launch the first government-backed digital currency in 2021. He believes that it will be centralized, involving named accounts, and the government can monitor and seize it, just like China’s central bank digital currency DCEP (currently under trial).

Schweifer believes that states will make greater efforts than in the past to ban Bitcoin because they want to use blockchain to mint their own currency. But in fact, I don’t think this is enforceable, he said. His New Year’s resolution is to stay away from government-issued cryptocurrencies.

CZ believes that cross-border payments of stablecoins will continue to increase next year. He said: “Compared with traditional methods, using stablecoins or any cryptocurrency for cross-border payments is much easier and cheaper.” “I think this will be the driving force for the adoption of stablecoins in 2021.”

Lior Messika, founder of venture capital blockchain fund Eden Block, has three new annual resolutions. Eat more vegetables, listen to the developers, and be more selective. He said that investors should remember that although the cake is getting bigger, the competition will only become more intense from now on.

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