There have been rumors of cryptocurrencies going mainstream for some time now, but could 2020 be when it finally happens? To understand why this is a possibility, we need to look closely at some of the current signs.
PayPal’s adoption helps Bitcoin to a massive price increase
The famously volatile Bitcoin price swung massively upwards in November 2020, as it crashed through the $19,000 to reach its second-highest price in history. This might not seem like a big deal since its value has see-sawed regularly in the last few years.
Yet, many analysts believe that it may be different this time, as it could be a breakthrough that firmly establishes the digital currency as something that is here to stay. Part of the reason that the price has shot up like this is, arguably, down to the fact the PayPal recently announced that their customers can start to buy cryptocurrencies and then use them to make payments.
This isn’t restricted to only Bitcoin, as Litecoin, Bitcoin Cash, and Ethereum are also covered, meaning that PayPal users can buy any of these tokens and then use them to buy anything from the millions of merchants that accept this payment method. At the moment, it is only available for American users, but it seems to have already made an impact.
Ripple could make transfers cheaper and easier for everyone
Bitcoin hasn’t been the fastest climbing crypto lately, since Ripple doubled its value in just a week or so and had quadrupled in price since the start of 2020 before it crashed due to a Coinbase failure. Part of the reason for this spectacular rally appears to be that the legislation covering the use of digital money to send transfers is clearing up.
The US Office of the Comptroller of the Currency bill is expected to stop banks from attempting to ban cryptocurrencies from competing in the money transfer market. This could make international transfers faster and cheaper for everyone if they use Ripple.
Increasing use of Bitcoin as a safe haven
Traditionally, gold and the US Dollar have been regarded as the safest havens for investors in times of economic turmoil. Yet, there have been arguments put forward in the last few years to suggest that Bitcoin could act as a store of value, making it another type of safe haven.
Not everyone agrees with this, mainly because the digital coin’s wild price swings aren’t what we would normally associate with a safe haven. According to investor Mike Novogratz, Bitcoin is “like digital gold”. But according to a Forbes article by Roger Huang, BTC has “some commonalities with gold” without being similar in other ways.
Yet, the evidence in 2020 seems to suggest that more people are turning to BTC as a way of keeping their cash safe from the turbulent stock markets and commodities markets. The fact that only 21 million Bitcoin can ever exist creates a sense of scarcity, as with gold, and could help it to maintain its value while there are genuine fears of inflation rising across the planet.
The fact that it is almost impossible to know how many people own BTC makes it difficult to prove this theory on an individual investor level. However, the changing attitudes of businesses towards cryptos could hint at a new way of viewing Bitcoin. In this respect, some tech firms like Square Inc and Microstrategy have plowed a percentage of their cash reserves into BTC recently.
There has also been increased interest in trading cryptos. One of the reasons given by the Top Rated Forex Brokers service for the popularity of BTC in trading is that it’s a highly volatile asset. This means that traders can trade on it regularly without ever having to buy it. The most commonly seen trading pair in this market is BTC/USD, but it can be paired with other currencies.
Overall, it is still too early to suggest that cryptocurrencies have finally gone mainstream. Having said that, the current signs definitely seem to be pointing in that direction right now.