In this article we discuss the 10 biggest Bitcoin predictions in 2021. If you want to skip our detailed analysis of these predictions, go directly to the 5 Biggest Bitcoin Predictions in 2021.
Bitcoin, the most popular cryptocurrency, has fallen by close to half in value from a peak of around $64,000 since April, resulting in social media speculation around crypto-related stocks in general and the future of blockchain technology in particular. Some of these concerns have come amid a renewed government crackdown against digital currencies in China, one of the most important internet markets in the world. However, financial experts have stepped in to fill some of the information gaps and soothe investor concerns on the issue.
Crypto-related offerings, by the very nature of a business still in infancy, are volatile. Smart investors realize this, and often understand why a dramatic fall in value for a technology that is universally considered revolutionary might actually represent a buying opportunity, instead of a panicked selloff. Another solid indicator of long-term outlook on crypto is hedge fund interest, and many of the top performing funds over the past twelve months, including ARK Investment and Bridgewater Associates, hold crypto-related assets.
There has also been a lot of buzz around the energy usage of Bitcoin mining, with Tesla, Inc. (NASDAQ: TSLA) chief Elon Musk leading the pack in this regard. Some finance experts also think that Ethereum, the second most popular coin, could overtake Bitcoin in value eventually. The consensus, however, remains that Bitcoin has a brand value that extends far beyond other coins, and a history going back over a decade that lends further credibility to it when compared against coins that were just released a few years ago.
Some Bitcoin competitors actually started out as a joke and experts argue that coins like these help in improving the overall credibility of Bitcoin. Dogecoin, for example, started out as a prank but has now become one of the best-performing cryptocurrencies in 2021, due in part to the social media antics of Tesla, Inc. (NASDAQ: TSLA) chief Musk, up more than 10,000% at a peak year-to-date value before pulling back by over 30% since. A couple of more serious contenders to the Bitcoin throne are Ethereum and Ripple, two blockchain-based currencies that offer advantages over Bitcoin when processing transactions.
Companies like PayPal Holdings, Inc. (NASDAQ: PYPL) and Twitter, Inc. (NYSE: TWTR) have taken advantage of this competition between coins and set standards for collaborations, thereby ensuring a level of quality in a space that is still unregulated and subject to frauds of various kinds. PayPal Holdings, Inc. (NASDAQ: PYPL) and Twitter, Inc. (NYSE: TWTR) have global outreach and their actions have consequences for blockchain in not only the US but in hundreds of countries across the world.
The fiscal year is far from over and Bitcoin still has a lot of room to run before investors would need to reconsider the overall situation. However, despite recent setbacks, it is evident that cryptocurrencies, and Bitcoin in particular, have transformed finance for years to come. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 biggest cryptocurrency predictions in 2021.
10. David Solomon, CEO Goldman Sachs
Prediction: Big Evolution is Coming to Bitcoin Regulation
David Solomon is the chief executive officer of The Goldman Sachs Group, Inc. (NYSE: GS), a New York-based investment bank and financial services company. The bank earlier this year reopened a cryptocurrency trading desk and started offering clients exposure to crypto investments. Solomon touched on Bitcoin in an interview with CNBC in April.
Solomon was of the view that there was a big evolution underway in the world of Bitcoin and other digital currencies, primarily related to the regulations surrounding the involvement of established financial institutions in blockchain technology. Solomon said that The Goldman Sachs Group, Inc. (NYSE: GS) was keeping a close on crypto as the situation developed.
When asked about whether the bank was actively lobbying for rule changes in this regard, Solomon said that the space was still evolving and The Goldman Sachs Group, Inc. (NYSE: GS) was trying to be responsive to clients. However, Solomon reiterated that there were still significant restrictions around the bank acting as a principle around Bitcoin.
Just like Tesla, Inc. (NASDAQ: TSLA), PayPal Holdings, Inc. (NASDAQ: PYPL), and Twitter, Inc. (NYSE: TWTR), The Goldman Sachs Group, Inc. (NYSE: GS) is one of the best crypto stocks according to the 10 biggest Bitcoin predictions in 2021.
9. Jack Dorsey, CEO Square
Prediction: Bitcoin Protects Against Currency Devaluation
Jack Dorsey is the chief executive officer of Square, Inc. (NYSE: SQ), a California-based digital payments company with $400 million in crypto-related investments. Dorsey has been a long-time advocate of the wider adoption of digital currencies like Bitcoin, and attended a Bitcoin conference in Miami last week to reiterate his bullish view on the currency.
Dorsey told conference attendees that Bitcoin was the important thing to work on in his lifetime. The Square, Inc. (NYSE: SQ) CEO said Bitcoin has the potential to create a whole new financial infrastructure that would serve communities of all types. Dorsey recently partnered on a new Bitcoin endowment to help the development of the currency in India and Africa.
At the Miami conference, Dorsey, who has seen the stock of Square, Inc. (NYSE: SQ) fall in recent weeks amid a lull in the market around growth stocks in general, said that no single person or institution could stop the rise of Bitcoin. He also noted that Bitcoin was fast becoming a hedge against currency devaluations around the world.
Just like Tesla, Inc. (NASDAQ: TSLA), PayPal Holdings, Inc. (NASDAQ: PYPL), and Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ) is one of the best crypto stocks according to the 10 biggest Bitcoin predictions in 2021.
8. Charlie Munger, Vice Chairman Berkshire Hathaway
Prediction: Bitcoin Success is Contradictory to Development of Civilization
Charlie Munger is the vice president of Berkshire Hathaway Inc. (NYSE: BRK-A), the Nebraska-based holding company with core interests in the insurance industry but stakes in several large consumer staples corporations as well. Munger is the second-in-command to Warren Buffett, perhaps the most successful long-term investor on Wall Street in modern history.
Although Berkshire Hathaway Inc. (NYSE: BRK-A) has a diverse portfolio, Munger and Buffett have avoided dabbling into digital currencies. At an annual shareholder meeting earlier this year, Munger was asked to comment on the meteoric rise of Bitcoin and whether his company had made a mistake by not jumping on the crypto bandwagon.
Answering the question, the vice president of Berkshire Hathaway Inc. (NYSE: BRK-A) did not hold back in expressing his views on the matter, saying that he considered the success of Bitcoin to be disgusting and an affront to civilisation. He also said that he was skeptical of financial products like Bitcoin that someone had produced out of thin air.
7. Michael Novogratz, CEO Galaxy Investment Partners
Prediction: Bitcoin Pullback is a Buying Opportunity
Michael Novogratz is the chief of Galaxy Investment Partners and former partner at Fortress Investment Group LLC. He belongs to a small group of hedge fund managers who have been pushing crypto-related investments to clients, dismissing concerns around volatility and regulations by touting the explosive potential of the product.
In a recent interview with business news platform CNBC, aired on May 18, Novogratz appeared to brush aside long-term speculation around Bitcoin, reiterating his bullish stance on the coin and saying that the fall in value actually represented a buying opportunity for investors, noting that despite recent setbacks, Bitcoin was still 50% up year-to-date.
While urging people with the means to go all out on Bitcoin, the hedge fund guru commented how the fall in value of the most popular cryptocurrency was actually just a test of investor confidence, detailing that markets were never supposed to be easy and that if they were easy, everyone on the planet would be as rich as they wanted to be.
6. Stanley Druckenmiller, Former President Duquesne Capital
Prediction: Very Tough to Unseat Bitcoin as Ultimate Store of Value Among Assets
Stanley Druckenmiller is the billionaire former president of Duquesne Capital, a hedge fund with one of the best track records on the market. He is an old-school investor who has made his name in the industry by working alongside George Soros, one of the most famous investors in the world today. Druckenmiller has not been the most vocal Bitcoin admirer in the recent past.
But his views on Bitcoin have changed since he called the currency a solution in search of a problem a few years ago. In late May this year, he sat down for an interview with news publication The Hustle and was very candid about the evolution of his position on Bitcoin, even admitting that he felt like a moron for not buying Bitcoin as it was going up.
Expressing his views on the recent fall in value of Bitcoin and the idea that other coins like Ethereum could overtake Bitcoin, Druckenmiller explained why that was unlikely, saying that it would be tough to unseat Bitcoin as the ultimate store of value among assets because it had become brand, been around for a long time, and had a finite supply of tokens.
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Disclose. None. 10 Biggest Bitcoin Predictions in 2021 is originally published on Insider Monkey.