Is Bitcoin Still Profitable in 2021?

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The world of cryptocurrencies is a very volatile and unpredictable one. After the price of Bitcoin (BTC) shot up to nearly $20,000 in 2017, more people than ever have shifted their focus towards cryptocurrencies and blockchain technology as viable investment options. After a significant market correction, which has seen the worth of one Bitcoin drop down to a couple of thousand dollars per coin only a year after the boom, many people got discouraged by it and refrained from further investment.

In 2021, however, Bitcoin is at an all-time high, and the interest in crypto has skyrocketed once again. BTC is being used in online retail, or on gambling platforms such as My Bitcoin Slots, but it’s primarily being looked at as an investment. After reaching breaking through the $30,000 threshold, is the market in for another correction? Should you invest right now, or wait for a significant dip before putting your money in Bitcoin? Do you even stand to gain a lot of money by investing in it in 2021? If you found yourself asking any of those questions, you’ve come to the right place. This article will look at some of the developments in Bitcoin, as well as the newest speculation to help you make an informed decision.

Will Bitcoin Drop Significantly?

As of November 2017, Bitcoin has reached an incredible milestone.  It took the cryptocurrency only eight years to reach a $100 billion market cap. In 2021, this has risen to over $600 billion. These astronomical heights, however, tend to not last for very long. While many experts agree that it’s highly unlikely that Bitcoin will drop from $30,000/coin to zero, there is a chance that it will see a major correction in the near future.  The euphoria surrounding cryptocurrencies has sparked a lot of interest, and the hype behind this new technology is only going to continue getting bigger in 2021, especially with the impact of the coronavirus pandemic on the global economy and people looking for alternative ways to allocate their funds.

For those who are looking to invest in Bitcoin because they believe that the cryptocurrency will rise in value exponentially over a period of time, the best strategy is to buy and hold onto their coins until they have reached their target returns. Do not day trade and freak out if you notice a significant dip. If you’re planning on investing in Bitcoin, there are some ingenious ways to go about it that could hit the ground running in 2021.

Bitcoin ETFs in 2021

Major players in the cryptocurrency market have started applying for an ETF license with the US Securities Exchange Commission (SEC) back in 2017. They were denied plenty of times, but recent developments seem to suggest that Bitcoin ETFs might become reality soon enough. If these rumors come true, there are good chances that we’ll see Bitcoin ETFs available for investment in 2021.

That being said, the SEC hasn’t been very positive when it comes to approving ETFs until now. The only reason this has changed is that VanEck (which has applied for the license in January) is a reputable company with strong financial backing, unlike other firms who have already been denied before them.

While there are many people who think that ETFs are a bad idea for cryptocurrencies because they can be easily manipulated, it certainly represents progress towards a legitimate future for cryptocurrencies. If you’re looking at ways to invest your money right now, hold off until we get some clarity on whether or not we’ll see Bitcoin ETF’s soon.

Bitcoin Can Become Even More Decentralized

The last time an update for a BTC fork was implemented led to a significant dip in its price before it started increasing again. There were many reasons why this happened; one of which was because not everyone agreed with this change. As more forks occur on top of each other, however, it seems like investors become more hesitant about making any long term investments into this market as a whole. Institutional investors and hedge funds are not fond of decentralized currencies, and who could blame them? They are independent of banks and most financial regulations. As long as demand for cryptocurrencies, Bitcoin, in particular, remains high, this increasing decentralization may only mean one thing: more profit to the little guy, if he’s willing to stick it out through large dips.

Those who do have faith in the future of crypto will be rewarded with big returns over time. While many people are still skeptical about what happens when hard forks occur (will everyone agree with this change?), your best bet would be to hold onto your coins until another hard fork occurs — we’ve seen how it goes from there.

The Bottom Line

In the world of crypto, Bitcoin is starting to become a little bit like gold, or other precious metals: it’s always a sound investment opportunity. Of course, gold is not plagued with the crazy levels of volatility as BTC, but on the other hand, it does not hold the potential for such high earnings! To answer the question posed by the title: yes, Bitcoin can still be profitable in 2021, provided that you’re willing to get in on it in the long run. As the 2017 boom has taught us, investors would be wise to expect another significant drop in the price of Bitcoin. Blockchain is the technology of the future, and the possible implementations are near-infinite. Cryptocurrencies have never been a “get-rich-quick” option, despite what some may think. With the right mindset, you might stand to gain a lot from investing in BTC in 2021.

 

 

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Adam Tanton

Adam is a partner in B2BNN with over 15 years experience in the enterprise technology field.