The past couple of weeks have been a hotbed of all kinds of rumors and expectations when it comes to the future course of the crypto market. Since the break of the bull cycle in May, the crypto markets, especially bitcoin but also other digital currencies as well, have been in a state of slow but painful recovery. Ethereum, with all of its tech advantages and now a substantially different market pitch than its older sibling bitcoin had the same amount of problems. That applies to nearly any other digital currency with some exception for things like solana, which managed to bank on their novel status to a degree. But, all of the ecosystems basically spent the past several months trying to shake off the feeling that the May crash is just the first step of a ladder that would eventually lead to 20,000 USD per bitcoin token or even deeper into a bear cycle.
However, fast forward to the mid-October period of the same year and the outlook for the crypto market could not be any more different. The processes that pushed down the price at the start of summer 2021 are all but gone, including some massive movers and shakers – China – that literally took themselves out of the equation for some unclear reason. Now, the skies are clear and the path towards new record prices seems to be all but set because of the decision of the US regulatory body, the SEC. With its approval of a crypto-linked financial product, it seems that BTC and all other digital currencies with it could have a fantastic end of the year.
The support that bitcoin had over the past decade really came from all manner of sources. Some of these have been individuals, like famous celebrities or even billionaire investors. At other times, support came from corporate and institutional entities, like massive international companies. That included businesses like MicroStrategy and Tesla Motors, which hold together over two billion USD in digital assets, mainly the BTC token. However, 2021 saw a big change in the support landscape because bitcoin, for the first time ever, got support from an entire sovereign country.
That country is El Salvador and it started using bitcoin as its officially recognized national currency. Of course, this South American nation is both small and not very significant in the wider geopolitical and financial arena. But, it is still a fully-fledged nation that decided to do what no one did before and take in bitcoin just as it takes any other foreign currency. That kickstarted a process that is still invisible, but one deemed to grow further as the idea is now implanted in mind across the globe, all considering the pros and cons of their country doing the same.
One of the main reasons for the crash in May was the problem of energy consumption of the bitcoin network but also the crypto space as a whole. With mining rigs that work day and night to support the blockchain digital currencies that use it, the amount of energy that the crypto networks consume is growing steadily. Just a few years back, that information was considered a feather in the hat of any digital network that applies these proof-of-work blockchain principles. After all, spending as much electricity as a small nation shows that any venture is not just sought-after but also working for an ever-growing number of entities that employ it. That is why the mining pools that make the same mining process possible are up and working, spending and paying for all that electricity.
But, by the middle of 2021, the notion of spending too much energy on anything is now a very divisive concept. The reasons behind it are all too well known. Global climate change, enforced by endless consumption, is now creating havoc across the globe. With bitcoin adding to that, many were quick to judge the same venture as another greedy undertaking that is killing the planet. But, the truth is that a lot of the crypto network was even back then fueled by renewable sources. The reason for this was not only environmental but also cost-related. Simply put, green energy is a chapter. Today, more and more crypto mines are transitioning to this energy solution and soon enough, almost all crypto will be fully green.
For the most part of the crypto history, China has been one of the key players on the same global playing field. It held most of the crypto mining pools and produced most of the gear for this purpose, including experimenting with the latest crypto rigs. On the other hand, the government of China warned about the unregulated nature of the crypto ecosystem. All of those threats came with a promise of an eventual crackdown.
In the middle of 2021, that crackdown finally came, and now almost anything and everything related to crypto is illegal. With that, China is now a growing smaller and smaller crypto presence. Yet, even with the crackdown and massive China FUD moment, the crypto market simply kept going. In many ways, it outgrew its key regional hub in the physical world and became something much more adaptable and nimble, but also less tied to any individual nation. With that, the Chinese unknown of a potential ban became a very published known fact and it did not sink the crypto ship.
Records on the Horizon
All facts point towards an incoming rise both in price volatility and network results, including the key market capitalization and token price. There are no visible issues that can suddenly pop out and stop that bullish potential from realizing itself, apart from any sudden US regulatory decisions that would come out of the blue. Like in the domain of esports, the match of crypto vs 2021 issues seems to be steadily shifting towards its first participant. That is why it is plausible to expect new records not just for bitcoin, but also for all other crypto networks as well.