Is 2021 the year of cryptocurrency?

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This year has been a blockbuster year for cryptocurrency. From Elon Musk’s Dogecoin investment, to fears ‘the bubble could burst’, to Bitcoin reaching record high levels – it is hard to predict what is next. As the rise in popularity for cryptocurrencies drastically picks up pace, Business Leader looks into what it all means for investors for the rest of 2021.

Cryptocurrency study reveals UK investors one of the highest investors in crypto

Cryptocurrency refers to digital currencies such as Bitcoin, Litecoin, Ethereum and many more. Despite being launched in 2008, cryptocurrency has become of significant global interest over the last few years – seeing a 203% Google trends increase over the last year alone.

Since its launch, cryptocurrency has been surrounded by a lot of skepticism, arguably demonstrated by 696,000 Google searches occurring globally each month. But who is most interested in this form of digital currency and what are their main concerns?

Eager to find out, experts at Invezz utilised online analytics tool Ahrefs to discover which countries in the world are most interested in cryptocurrency and what are their main fears.

The Countries Most Interested in Cryptocurrency

Rank Country Average Annual Online Searches
1 United States 2,556,000
2 India 804,000
3 United Kingdom 648,000
4 Indonesia 324,000
5 Canada 300,000
6 Vietnam 276,000
7 Australia 273,000
8 Nigeria 192,000
9 Philippines 144,000
10 Thailand 132,000
11 Germany 132,000
12 Pakistan 120,000
13 Malaysia 106,800
14 South Africa 94,800
15 The Netherlands 87,100
16 Japan 79,200
17 France 72,000
18 Ireland 68,400
19 Turkey 66,000
20 Singapore 61,200

Invezz.com can reveal that the United States is the country most interested in cryptocurrency, with an astonishing 2,556,000 online searches regarding cryptocurrency each year – the equivalent of 7,003 online searches per day

Ranking second is India, where there are 804,000 annual online searches about cryptocurrency. Despite following in the leader board, this is still 69% lower than the United States.

United Kingdom follows in third place with an average of 648,000 online searches about cryptocurrency each year.

Indonesia (324,000), Canada (300,000), Vietnam (276,000), and Australia (273,000) are among the other countries in the world where there are over 200,000 annual online searches about cryptocurrency, respectively ranking fourth, fifth, sixth and seventh.

At the other end in 20th place is Singapore seeing an average of 61,200 online searches relating to cryptocurrency each year.

World’s Biggest Cryptocurrency Fears Answered

Through analysing search volumes, experts at Invezz were able to rank the world’s most Googled concerns surrounding cryptocurrency, for which an expert at Invezz.com provides the  answers:

Is cryptocurrency safe?

Yes, cryptocurrency is safe. In fact, it’s arguably safer than any other form of money. All funds stored in cryptocurrency are secured by blockchain technology and a reliable record of ownership. On top of this, cryptocurrency wallets are so well encrypted that they are virtually impossible to hack into. Your only concerns should be the same as with any personal finance accounts – keep your account passwords and wallet private keys safe and your funds will be protected.

Is cryptocurrency a good investment?

There are definitely good investment opportunities around and young people especially are hopping in and making a lot of money.

Bitcoin is among the best-performing assets of the past decade, and it’s clear that there is money to be made by investing in digital currencies. Cryptocurrency has forged its place in the financial landscape, and at this point, the question is one for each individual investor to answer for themselves.

Is cryptocurrency legal?

Yes, there is nothing illegal about cryptocurrency. In any country where online trading is legal, it is almost certain that cryptocurrency will be too.

Why does cryptocurrency value drop?

Many reasons, news, usability, adoption, demand. The price of any publicly traded asset is decided by the buyers and sellers reaching an agreement on its fair valuation.

Cryptocurrency markets are notoriously volatile, just like any new market before it’s had time to mature. While the technology is clearly here to stay, nobody can say for certain what the long-term future of cryptocurrencies will be, and it’s that uncertainty which leads to a very reactive market prone to sharp swings.

Why are people sceptical about cryptocurrency?

People are always nervous about change, and cryptocurrency poses a threat to traditional finance. The only real remedy for people’s scepticism will be time. Bitcoin was launched in 2008, but it is only in the last year or so that governments, large institutions, and companies have started to take it seriously as both a solution and investment class. While it’s been a long time coming, this is a positive step for cryptocurrency and bodes well for its acceptance by society as a whole.

Consequences of the ‘Bitcoin Rally’

2021 has seen a drastic rise in the price of Bitcoin Graphic Cards.

So far this year, graphics cards with saw price rise of up to 78% due to rally in bitcoin price.

The popularity in them in the US earlier this year, so a mass investment by US citizens using their stimulus checks to buy bitcoin – although many were threatened by the dangers presented by criminal actors exploiting the surge by using fake websites.

However, the bitcoin rally continues and the price of the digital currency has climbed by 8.8% in the last seven days alone. The implications of this extend well beyond those invested in cryptocurrencies. In a new data from Block-Builders presents interesting facts and information on the effects of the crypto-hype.

Cryptocurrency mining requires powerful graphics cards. The growing interest in bitcoin and other crypto is pushing up the prices for such cards – and by that we mean substantially. Take for instance AMD’s RX 580 8GB graphics card, which has seen its price rise by a whopping 77.6% since November 2020. A similar effect can also be observed for various comparable NVIDIA graphics cards.

The side effect of this is the greater demand for energy: bitcoin infrastructure requires 120 terawatt hours annually, more than the entire energy consumption of the United Arab Emirates. The question of whether this is justified by the currency’s other benefits is a hotly disputed issue.

Bitcoin accounts for 40% of gold’s average daily trading volume in 2021

Data calculated by Finbold indicates that bitcoin’s average daily trading volume between January 1, 2021, and March 15, 2021, is at $70.18bn. The figure accounts for 39.41% of gold’s $178.97bn average daily trading volume for the same period.

Elsewhere, bitcoin’s market capitalization as of March 16, 2021, stands at $1.04tn. The amount accounts for just 9.46% of gold’s $10.99tn, an indicator that more investors are more speculative about bitcoin than the precious metal.

Bitcoin, gold trading volume remains significant amid a pandemic

The report offers the perspective on the trading volume for both bitcoin and gold amid the ongoing coronavirus pandemic.

According to the research report: “Both bitcoin and gold’s trading volume remains significant, partly due to the perception that the assets can act as a hedge against the risk of inflation, especially in the wake of the coronavirus pandemic. During the crisis, central banks resolved to issue stimulus packages and printed more money in return, devaluing traditional safe-haven currencies like the U.S. dollar. For instance, over the last 50 years, the dollar has depreciated by 85%, partly due to the government’s reaction during economic meltdowns. Overall, both bitcoin and gold remained resilient during the pandemic, especially when the traditional stock market collapsed before recovering.”

Currently, the two assets are battling for the safe-have status despite gold having the upper hand historically. However, the real safe-haven will stand in the post-pandemic phase.

Corporate investors taking profit from Bitcoin – but price won’t drop below $30,000

After reaching an all-time high price recently, the price of Bitcoin has once again started to see a correction. But what’s next for this volatile digital asset? Gregory Klumov, CEO of Stablecoin platform STASIS and Crypto expert says that whilst he anticipates further drops due to sell-off from investors taking profit, the asset won’t drop below $30,000.

It has becone known to the market that several corporate investors have started taking profits in Bitcoin. One Israeli pension fund announced that it has realised a third of its hundred dollar investment which has tebled in value, driving them to start selling the asset. You can’t blame them for a quick 3x cash on cash profit in such a short period of time. I assume several big investors are also currently in process of liquidation of their positions in crypto and that massive selling can bring the number one crypto lower. However, I don’t anticipate the correction to go deeper than $30.000 per Bitcoin.

Against the backdrop of an increase in institutional interest (as well as speculative demand from retail investors) Bitcoin has grown by about 1000% over a single year. Back in 2018, I predicted that Bitcoin would be worth $100,000 in three years. At present, we are following the trajectory of fulfilling this forecast. I’m not sure if this prediction will actualize in 2021, but I believe it will invariably happen next year,” he adds.

Bitcoin has repeatedly been hitting ATH (All-time-highs) on the weekends. This happens due to retail buyers’ activity, who predominantly buy the “blue chip” crypto, while major sales and declines often occur on weekdays. Bitcoin ended the last week near the new record, so it was not difficult to push it into the new milestones and break the next round level. Keep in mind that the markets have lower liquidity on weekends.

More from Business Leader

It is safe to say that Bitcoin and cryptocurrency will continue being an increasingly appealing investment for entrepreneurs, and Business Leader will be keeping you up to date on all the latest news.

For starters, please see more analysis on the topic with these articles.

Blockchain – what is it and why do we need to start thinking about it?

Who are the richest entrepreneurs in cryptocurrency?

Is now the time to invest in Bitcoin?

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