As PayPal recently announced the launch of its ‘Checkout with Crypto’ initiative, we saw the price of Bitcoin (BTC) achieve a record-high price in excess of $64,000.
Despite the initial impact of this announcement and the fact that the new feature would allow consumers and businesses to check out using various digital tokens, BTC has subsequently plunged by 15% and taken assets including Ethereum (Ether) and Ripple (XRP) with it.
There are various factors behind this, including the decision of the US Treasury to tackle such digital assets and institutions that may be used to launder money. But will continue to cap Bitcoin’s growth, or could the mass adoption of cryptocurrency finally see BTC realise its full potential?
BTC’s Performance Through 2020 and its Core Challenge in 2021
The last 12 months has seen a sustained BTC bull run, and the single most impressive since 2017.
However, while the former run saw the value of Bitcoin increase from $900 to $20,000 in the 12 months through December 2017, BTC saw its price subsequently decline by more than 50% to barely $8,000 by the following summer.
More recently, the value of Bitcoin has increased nearly 10-fold in the year ending April 2021, while there’s no immediate sign that BTC (or similar assets) will experience such a marked decline in the near-term.
However, the recent, 15% slump is a reminder that BTC and the crypto market remains precariously poised, with Bitcoin arguably in need of more widespread adoption and credible partnerships if it’s to enjoy a sustained breakthrough beyond the $60,000 mark.
We could see some movement in this respect in the coming weeks, however, with the Oanda trading platform reporting that the US crypto exchange Coinbase is expected to go public and many central bankers continue to share their opinions of digital currencies.
What to Expect for BTC in the Near-term
Ultimately, a disappointing IPO for Coinbase or further speculation about increased regulatory oversight could weigh heavily on Bitcoin, forcing its price even lower and below the $50,000 mark once again.
This could also have a cascading effect on leading altcoins, causing huge depreciation in the crypto market and paving the way for third-generation blockchains to lead a new-look marketplace.
This means that Bitcoin or a leading altcoin needs more brands such as PayPal to embrace the blockchain technology in the near-term, whether this is a Wall Street giant or a central banking institution.
However, the fact remains that central banks in regions such as China and Europe are more preoccupied with creating digital yuan and Euro assets as reinvented iterations of fiat currencies, which advance the notion of cryptocurrency without promoting the cause of individual assets such as Bitcoin.
In this case, BTC is likely to remain mired around the $60,000 mark or lower for the foreseeable future, and increasingly far removed from its most optimistic price predictions for 2021 and beyond.