As virtual currencies multiply and traditional currencies go through a crisis phase, the democratization of cryptocurrencies is beginning to be confirmed on an economic level. The next few years could mean an intensification of the spread of cryptocurrencies observed in recent years. The spread of this new form of currency in everyday life could therefore lead to particularly interesting economic and financial reactions.
In this article, discover the various factors that indicate that virtual currency will soon be part of our daily means of payment and our reflections on how the individual investor can take advantage of this important turning point in the history of money.
Virtual currency: the multiplication of flows and global users
The multiplication of cryptocurrency flows in recent years
In 2018, the number of cryptocurrency users worldwide was estimated at 35 million. According to a study by the University of Cambridge, there would be nearly 100 million crypto holders worldwide today in the first half of 2020, an increase of nearly 185% despite the major cryptocurrency price drop over that period.
These numbers can be found in the capitalization of the most important cryptocurrencies. Bitcoin totaled $ 15 billion as of December 2016 compared to the current $ 290 billion. If we have to compare this rating to GDP to give an idea, Bitcoin represented 0.6% of France’s GDP at the end of 2016, up from more than 13% today. In other words, Bitcoin’s capitalization is now higher than that of companies like LVMH for France or Bank of America for the US.
Increasingly, users are looking for crypto
The resulting multiplication of flows on a global scale can be explained by two comparative advantages of cryptocurrencies:
The giant Paypal allows the use of cryptocurrencies to pay for their purchases
In a statement via Reuters, PayPal announced it would « join the cryptocurrency market […] by allowing customers to buy, sell and hold Bitcoin and other digital assets through Reuters’ online wallet accounts. » This new option on the PayPal platform is intended to be in the will come into force in the first half of 2021. This option is handled by the broker Paxos Crypto Brokerage at the regulatory, technological and liquidity level.
Additionally, PayPal intends to distribute major cryptocurrencies for its 346 million active PayPal accounts (accounts that made more than $ 220 billion in transactions in Q2 2020). This means that with PayPal’s decision alone, the potential number of cryptocurrency users will be up to three times the number of current users.
Dan Schulman, CEO of PayPal, has made no secret of his ambitions for cryptocurrency either. He intends to work with the central banks to find the maximum means to allow PayPal to prevail on this matter. PayPal’s decision to view this new form of currency as an opportunity created a real euphoria behind the scenes, and many institutional investors immediately revised their positioning.
Facebook should soon allow payments with its own cryptocurrency
After the announcement of the Libra project in June 2019, the regulatory will of many countries and the waiver of support such as PayPal or Visa prompted the review of the project. Bloomberg announced in early December that the Libra project had been renamed Diem. This would have 27 participants, a far cry from the 100 originally announced. This stable coin, Diem, which the Financial Times says is expected to hit the market in early 2021, would also initially be pegged to the dollar.
Even if this cryptocurrency stays in contact with traditional currencies, we must not forget that Facebook has more than 2 billion users. Here, too, the democratization potential is disproportionately high, albeit less than originally forecast by Facebook.
The central banks issue their own tokens
The 21st century will certainly shape monetary history. Throughout history we have seen underground currencies emerge in response to excessive currency deterioration. This time around, however, the extent of this historical figure seems more concretely and paradoxically supported by some central banks.
The proliferation of private cryptocurrencies in a digital world where free choice of currency would become the norm is encouraging central banks (and states on regulation) to step in so as not to fall into the trap. Many central banks are considering creating their own digital currencies: MNBCs (Central Bank Digital Currency), also known as CBDC (Central Bank Digital Currency).
The reduction in currency exchange and the increase in private currency exchange are forcing institutions like the Banque de France to put their own tokens on the market. In December 2019, for example, the Banque de France announced the creation of a digital currency that was being tested for the first time in the context of financial institutions.
How can the democratization of virtual currencies be used?
Growing users lead to higher cryptocurrency prices
In view of our 21st century economy and therefore in view of the growing need for decentralization and international currency freedom, we can rightly expect that the democratization of cryptocurrencies in recent years will intensify.
The democratization of cryptocurrencies is undoubtedly a bullish price factor for currencies like Bitcoin, which only have a limited number of units in circulation. It is therefore evident that a direct impact of the massive democratization of cryptocurrencies is the rise in forward prices. In addition to the decline in the financial burden, this has led to a price increase at BTC or ETH (Ethereum) in recent months.
While the surge in recent weeks is due to more fundamental reasons, democratization is directly strengthening the long-term upside potential of cryptocurrencies (compared to previous years).
The cryptocurrency ecosystem is doing well
Another indirect effect of the democratization of cryptocurrencies is the development of a real industry in this matter. We will mainly cite the emergence of Decentralized Finance (DeFi), in which ChainLink, Wrapped Bitcoin, Dai or Aave are the main players.
In addition, there are also positive effects for all platforms that enable crypto investments. The fact that cryptos democratize at the transaction level should systematically lead to a democratization at the level of savings or the like. We’re going to mention players like Binance, CoinBase, or even emerging platforms like SwissBorg, whose user base is growing.
Just as traditional currencies are linked to the banking industry, virtual currencies are linked to the crypto industry. It is therefore particularly appropriate to focus on companies that have the greatest potential to hold their own in the face of the proliferation of cryptos. Far beyond the future of the industry, cryptocurrencies have the advantage of being able to develop a fast payment system that can be used in a very large part of the countries of the world, which is not possible compared to a traditional local currency that remains in China, a Brake on world trade.
The health crisis: a major turning point in the democratization of cryptocurrencies?
The Covid-19 crisis will have been a real opportunity for cryptocurrencies. The democratization of the past few years has convinced many institutions to take the plunge, such as Facebook, certain central banks and, more recently, PayPal. This context opens up a very significant democratization potential for the next few years, which is certainly greater than in recent years. Cryptocurrencies that have made their way into the financial landscape in recent years are now expected to enter the economic landscape. Cryptos therefore appear as an everyday means of payment (or even as an investment / saving).
All of our information is generic in nature. They do not take into account your personal situation and in no way constitute personalized recommendations for the execution of transactions and cannot be equated with financial investment advice or an incentive to buy or sell instruments. financially. The reader is solely responsible for the use made of the information provided, without recourse to the publisher of Cafedelabourse.com being possible. The responsibility of the editor of Cafedelabourse.com can in no way be accepted in the event of errors, omissions or inappropriate investments.
What is the most profitable cryptocurrency?
In our opinion, the most promising cryptocurrencies for 2020 and the coming years are the Tezos (XTZ), the Stellar Lumens (XLM) and the ChainLink (LINK), the prices of which have risen sharply in recent months.
How does the value of a cryptocurrency increase?
The number of people using the currency that trust leads to more or fewer people using the currency, which of course also adds to the value of the asset. What defines the value of a cryptocurrency is therefore also its popularity.
Which currency should I buy right now?
The Best Currency Pairs – The Major:
- EURUSD (Euro – US Dollar)
- USDJPY (US dollar – Japanese yen)
- GBPUSD (British Pound – US Dollar)
- AUDUSD (Australian dollar – US dollar)
- USDCHF (US dollars – Swiss francs)
- USDCAD (US dollar – Canadian dollar)
How can you invest well in cryptocurrency?
How do I invest in a cryptocurrency? You can invest in cryptocurrency by buying tokens through a special platform. You can also trade cryptocurrencies through an online broker like eToro by investing in a derivative that is based on the virtual currency.
Which crypto should be bought in 2020?
6 cryptocurrencies to buy for 2020 and beyond
- Bitcoin (BTC) First of all, I’m not going to be original, but rather efficient. …
- Basic Attention Token (BAT) The success of Basic Attention Token never fluctuates month after month. …
- Enjin Coin (ENJ) …
- Binance Coin (BNB) …
- Nexo (NEXO) …
- Ethereum (ETH)
How to invest in Bitcoin in 2020
How do I invest in Bitcoin in 5 steps?
- Register with Bitcoin Trader using this link.
- Create an account on the broker platform.
- Fund your account.
- Select Bitcoin and click « Buy ».
- Open a Bitcoin trading position.
What are the cryptocurrencies of the future?
Cryptocurrency: 7 virtual currencies will follow in 2021
- Bitcoin: the benchmark cryptocurrency. …
- Ethereum: the most widely used bitcoin and crypto challenger. …
- Binance Coin: The crypto that invites you to join the big leagues. …
- Ripple: much more than a crypto, a passport for decentralized finance.
Which crypto in 2021?
|Surname, surname||Market capitalization||Average price (USD)|
|Ethereum (ETH)||+ $ 22 billion||$ 200|
|Ripple (XRP)||more than $ 9 billion||$ 0.21|
|Bitcoin Cash (BCH)||+ $ 4.8 billion||$ 260|
|Tether (USDT)||+ $ 4.6 billion||$ 1|
When do you sell your cryptocurrency?
Buy on Sunday and resell on Wednesday Most of the tokens are more active on Wednesday. The second biggest day would be Thursday.
What future for Ethereum?
The price of ether rose 483% in 2020. That’s more than Bitcoin, which rose + 303% over the past year. Ethereum’s valuation is now at $ 110 billion (570 billion for Bitcoin). In late 2020 and early 2021, many records will be signed in the cryptocurrency market.
What are the 10 largest cryptocurrencies called?
The 10 richest people in bitcoins and cryptocurrencies
- 6 – Brian Armstrong ($ 900-1 billion)
- 7 – Matthew Roszak ($ 900 million to $ 1 billion) …
- 8 – Anthony Di iorio ($ 750 million to $ 1 billion) …
- 9 – Brock Pierce ($ 700 million to $ 1 billion) …
- 10 – Michael Novogratz ($ 700 million to $ 1 billion) …
Where can you buy cryptocurrency?
|Page? ˅||For whom ?||Payment method|
|Coinbase||Beginner||Credit card, transfers, cryptocurrency|
|eToro||Beginner||Credit card, bank transfer, PayPal …|
|octopus||Experienced||Credit card and transfers|
Where can you buy Bitcoin for free?
eToro offers the possibility to buy cheap Bitcoin as well as other cryptocurrencies like Bitcoin Cash. With eToro, it is possible to buy Bitcoin securely from an online broker whose reputation is well established.