NFTs, IPOs, a painful year for Ripple and PayPal's crypto service goes global: These are the 10 crypto stories to watch in 2021.
Happy New Year! At long last, 2020 is over — and now, it’s time to look ahead to 2021. Here are 10 stories that are going to dominate the crypto industry in the next 12 months.
10. The year of the stablecoins?
According to Blockchain Capital, the number of stablecoins in circulation surged by 500% in 2020 — cementing their reputation as “one of the most-used payment networks in the world.” Looking ahead, the company believes that the value of dollar-backed stablecoins will surpass $150 billion… and thinks Libra (now known as Diem) will join the likes of Tether and USDC.
9. NFTs will come into their own
Non-fungible tokens are set to build on a triumphant 2020 — a year that saw rare assets representing footballers and artwork go under the hammer for hundreds of thousands of dollars. Some of the world’s biggest brands, including top-flight football teams and the makers of Doctor Who, are already offering NFTs to avid gamers. Will 2021 be the year that NFTs shake off their image as a niche sub-sector and become an asset class embraced by the masses?
8. DeFi’s growth will continue
While 2020 was a questionable year for governance tokens, the total value locked in DeFi protocols remained resilient. User numbers have swelled in recent months, and this trend is likely to continue well into 2021. As innovation continues and new products hit the market, pundits also believe that DeFi will start to tackle some of the challenges that held the sector back — namely a lack of accurate price data.
7. Regulation, regulation, regulation
It’s likely that 2021 will shape up to be a bittersweet year on the regulation front. With the crypto sector’s market cap continuing to swell, central banks and governments will be looking at this space with renewed urgency. This can be a good thing — legitimizing digital assets and giving entrepreneurs much-needed clarity — but it could also result in punishing restrictions in nations that have been more hostile towards crypto. One of them is India, where rumors continue to swirl that the government is planning to push for an outright ban on trading once again.
6. A flurry of IPOs
You could argue that Coinbase is testing the water as it readies itself to take the plunge and list on the stock market. In recent weeks, analysis from Messari suggested that the exchange could end up with a valuation of $28 billion. If the water’s fine, expect many more crypto brands to unveil their plans to go public, too.
5. A big year for Ethereum
Ethereum will be making headlines on multiple fronts in 2021 — and not just because it’s the blockchain that serves as the bedrock for DeFi and NFTs. Work has now officially begun on Eth2, and the crypto community will be waiting nervously to see how this upgrade progresses. Will things run smoothly, or should we expect further delays? All of this comes before we’ve mentioned ETH. Can the world’s second-largest cryptocurrency return to all-time highs of $1,432 — and will enthusiastic forecasts of a surge to $2,000 or even $9,000 become reality?
4. Digital yuan: Going live?
China has been putting the digital yuan through its paces over the past 12 months, with trials taking place in several major cities. Beijing has expressed hope that the central bank digital currency will be rolled out nationally in time for the Winter Olympics in 2022. It’ll be interesting to see whether this milestone is met — and how the CBDC fits into a payments landscape that’s dominated by the likes of WeChat Pay and Alipay.
3. It’ll be a painful year for Ripple
Ripple is still reeling from the bombshell lawsuit filed by the U.S. Securities and Exchange Commission regarding the sale of XRP tokens. The company is beginning the year in a defiant mood, and has vowed not to go down without a fight. But with a number of major exchanges delisting XRP — and SEC lawsuits tending to be rather protracted — 2021 looks like it’s going to be an uphill struggle. Ripple and the SEC will first face off in a pretrial hearing in February. Based on how these cases have gone in the past, this will only be the start of a long process.
2. PayPal’s presence will be felt
After a low-key launch in the U.S., PayPal’s new crypto service — allowing Bitcoin, Ethereum, Litecoin and Bitcoin Cash to be bought, sold and held — is going global. Hundreds of millions of people will be able to acquire digital assets and spend them with an array of merchants. Early research from Mizuho Securities following the rollout in the U.S. suggested 20% of PayPal users polled had made full use of the crypto feature. Similar adoption internationally would undoubtedly send shockwaves through the industry — and shake up the world of payments as we know it.
1. Many predictions will be wrong
And we end with a note of caution. Every year, hundreds of pie-in-the-sky predictions — many of which bear no resemblance to reality — are made. Some of the biggest stories that will dominate the crypto sector this year haven’t even emerged yet. Case in point: back in January 2020, most of us hadn’t even heard of DeFi. Buckle in… 2021 is going to be a wild ride.
