A look at recent events that suggest how Bitcoin is entering mainstream adoption in 2021.
The year 2021 is starting to take an exciting turn for Bitcoin and the overall cryptocurrency industry. A series of events in the recent months show how Bitcoin is increasingly gaining mainstream adoption. Moreover, digital assets are drawing attention as a new financial asset class considering their rising popularity.
Bitcoin and Cryptocurrency Industry Enter Mainstream Adoption
The cryptocurrency industry’s overall market capitalization surpassed $1.5 trillion, with the market cap of Bitcoin reaching near $900 billion. Bitcoin’s price has crossed its all-time high surpassing $50,000 for the first time since its inception in 2008 as of February 2021.
From Bitcoin's price reaching an all-time high to prominent investors investing billions of dollars in the industry - the perspective of digital assets has significantly shifted. In this article, we look at the series of recent events that highlight how Bitcoin is turning mainstream in 2021.
Institutional Investments in Bitcoin
In 2020, we witnessed several institutional investors and corporations investing in Bitcoin. Square, led by Twitter CEO, invested $50 million in the leading digital currency. Most recently, Tesla announced that it had bought $1.5 billion worth of Bitcoin. Investment trusts holding traditional financial instruments like stocks and gold are now pouring millions of dollars into this new asset class.
With companies like Tesla and Square entering the cryptocurrency industry, major corporations are likely to follow in their footsteps. Furthermore, even prominent university endowment funds from Harvard and Yale have made investments in Bitcoin. Bitcoin is starting to grow as an investment class alongside conventional financial assets like Gold.
Retail Activity is Increasing
Recent analysis suggests that retail investors joining Bitcoin and the cryptocurrency markets are rising at a fast pace. The number of blockchain wallets has reached over 67 million as of February 2021. In nearly one year, the number of blockchain wallets increased by over 20 million.
Active addresses on the Bitcoin blockchain are rising as well. Recent research suggests that the number of entries holding BTC reached an all-time high of 23 million. This further indicates that retail activity and the number of retail investors holding BTC are growing. Users’ interest in holding Bitcoin is rising and therefore takes it one step closer to its normalization.
FinTech Firms Bridging the Gap Between Traditional Finance and Cryptocurrencies
The recent popularity of digital currencies has led to FinTech firms joining the digital assets space. FinTech firms have launched services that help bridge the gap between traditional finance and cryptocurrencies. XanPool is a software solution that offers an infrastructure that allows users to access various digital currencies with fiat currencies.
Moreover, it supports many fiat currencies allowing you to access digital currencies from different countries, including India, Malaysia, Thailand, Indonesia, Philippines, Singapore, and more. XanPool’s architecture facilitates near-instant conversions of fiat into crypto and vice versa.
Acceptance of Bitcoin as a Payment Method
There are significant benefits to accepting crypto as payment methods in exchange for products or services. Companies can access Benefits such as low transaction fees, instant payments, and global transactions via digital currencies. Many companies are now considering integrating cryptocurrencies within their infrastructure.
Recently, Tesla announced that it plans to offer Bitcoin as a payment method in exchange for its products. A recent study reveals that 36% of small-medium businesses in the US accept Bitcoin. Prominent companies that accept Bitcoin include Wikipedia, Microsoft, AT & T, Burger King, Overstock, and many more. In 2021, we are likely to see many organizations, including eCommerce stores, online websites, and businesses, accepting Bitcoin as a payment method. Additionally, with XanPool’s services, this integration of crypto in existing infrastructure becomes quite simple and easy.
One of the significant shifts in the overall adoption of cryptocurrencies has been the significant shift in governments adopting them. Instead of issuing warning statements prohibiting crypto usage, regulators have now moved their attention towards forming legal compliance that bounds crypto as an asset class.
Many countries have focused their attention on accelerating cryptocurrency regulations, including crypto in tax returns to declaring crypto as a financial product. Governments regulating the industry and establishing legal compliance will drive more people towards digital assets.
Scalability in Transactions
One of the persistent issues with digital assets has been the inability of blockchain networks to handle scalability in transactions. In other words, transactions with cryptocurrencies were relatively slow in comparison to traditional financial methods. However, blockchain networks have evolved, and subsequently, the transaction capacities of processing cryptocurrencies have increased.
The increase in scalable networks further provides the necessary infrastructure for cryptos to be adopted for mainstream usage. Hence, digital currencies can be used for facilitating daily transactions.
What Lies Ahead for Crypto in 2021
This year has undoubtedly bought many new developments for Bitcoin, crypto, and the blockchain technology space. The current scenario reveals that institutional adoption is likely to grow. More organizations, institutions, hedge fund investors will allocate digital assets space in their investment portfolios.
In 2021, we are also likely to witness several countries developing legal compliance for crypto space. The regulative measures bringing clarity to Bitcoin investments will also draw retail investors. A prominent trend that will see development is the adoption of crypto as a payment method. The services offered by firms like XanPool for digital currencies will allow merchants and eCommerce giants to adopt crypto as a payment method within their infrastructure.
Overall, it suffices to say that the cryptocurrency industry will have exciting developments with the asset class driving towards mainstream adoption.