While 2020 may have been a devastating year for health and the world’s socio-economic climate, it has delivered nothing but success for the cryptocurrency Bitcoin.
Incredibly, Bitcoin saw its price value increase by more than 305% during the last 12 months, while the formative days of the New Year have seen the market leading cryptocurrency break the $40,000 barrier for the very first time.
There are numerous reasons for this; from the relative demise of the US dollar to Bitcoin’s growing value as a safe-haven during times of economic tumult.
But could Bitcoin finally be poised to revolutionize the world’s existing financial systems? We’ll discuss this further in the article below.
Why the time may be now for Bitcoin
Bitcoin has always been a trail-blazing currency, but in some respects, it may have been held back by its innate volatility and chequered past.
However, there’s no doubt that Bitcoin came into its own during the previous 12 months, as it remained largely impervious to the social and macroeconomic factors that undermined more traditional assets such as stocks, agricultural commodities and fiat currencies.
As a result, investors have been compelled to invest in Bitcoin and gold as more secure stores of wealth in the wake of the coronavirus pandemic, with this having been borne out by the similar performance of these assets throughout 2020.
This has also caused investors and established financial institutions to perceive Bitcoin in a brand-new light, specifically as a fast-evolving asset that may finally fulfill its potential to revolutionize the global financial system.
According to Edward Moya from Oanda, this simple, bullish macro argument appears to be firmly in place for Bitcoin, with this driving incredibly high levels of sentiment and demand across the globe.
So, while price action will remain volatile in the near-term, Bitcoin’s value is likely to remain on a largely upward trajectory for the foreseeable future.
More specifically, it’s widely expected to break through the $50,000 barrier in 2021, while previously outlandish calls that it will ultimately rise beyond the $200,000 mark have just received their single biggest endorsement from JP Morgan’s strategists.
How is Bitcoin already revolutionizing the world’s financial systems?
The benefits of Bitcoin are well-versed, of course, from the anonymity offered by this currency to its levels of transparency and the fact that it remains completely immutable by third parties.
Given this, some forward thinking institutions have already incorporated Bitcoin into their models, while a number of crypto-based lenders have also inched their way into the consumer mainstream.
Take the cryptocurrency disruptor and lender BlockFi, for example, who recently announced a new rewards credit coin that will offer Bitcoin instead of traditional cash back, points or miles.
While this card remains a one-of-a-kind innovation, it actually joins a handful of crypto-focused debit card reward programs that have adopted a similar model. These have already begun to revolutionize the financial industry, while changing the way in which consumers borrow and utilise credit.
This type of trend is likely to become more pronounced in the near-term, particularly as Bitcoin starts to fulfil its potential and blaze a trail for other cryptocurrencies to follow.