In 2017, Bitcoin reached a price of $19,783 each but also dropped to $4,400 at one point.
Bitcoin and all of the other cyber currencies have no assets, nothing to guarantee a minimum value, so the prices can vary wildly and be highly unpredictable.
Ethereum fell in 2018 from a high of $1,300 to just over $90 by December, although it did rally after that.
Some people believe that Bitcoin and other cryptocurrencies should be considered to be a new asset class rather than a high risk novelty item and hope that governments and institutions will start to treat cyber currencies as assets suitable for widespread investment. Maybe this will happen in 2021 and accelerate the move to cyber currencies. However, there is nothing certain in this and cyber currencies may well have another bumpy unpredictable year.
The development of stablecoins may be a big step forward in wider acknowledgement of these currencies.
Stablecoins are cryptocurrencies designed to minimize the volatility of the price of the stablecoin, by pegging it to some “stable” asset or basket of assets. A stablecoin can be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities.
New stablecoins are being created to try to bring stability to the cyber currency market, but it’s not an easy step.
Some Popular Cybercurrencies
Bitcoin is the biggest and most famous of the cyber currencies and it has made a lot of people millionaires. However, it has also lost huge sums for people.
Some experts think Bitcoin could be one of the best cryptocurrencies to invest in through 2021
Ethereum is a major player and billions of dollars worth of Ethereum were traded in 2020.
A major upgrade called Ethereum 2 (or Serenity) is in progress, due for launch in early 2021.
This will make Ethereum more efficient and able to process more transactions more quickly.
Litecoin has a market capitalisation in the billions of dollars and is growing strongly.
It is connected to Bitcoin and that should help it’s future.
4. Bitcoin Cash
First launched in 2017, Bitcoin Cash was launched as a scalable branch of the original Bitcoin, after traders raised concerns over Bitcoin’s scalability.
It’s still going strong.
Ripple is interesting but more complex to understand as the name covers both the Ripple platform (RippleNet) and its virtual currency (Ripple XRP). XRP is currently the world’s fourth biggest cryptocurrency by market capitalisation.
Overall, cyber currencies are getting stronger each year and the likelihood of them becoming commonly used as an asset is increasing.
However, any investors need to be very wary of the volatile nature of these currencies.