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Bitcoin Price Prediction Forecast: How Much Will Bitcoin Be Worth In 2021 And Beyond?

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Bitcoin (BTC) is probably the most famous cryptocurrency in the world that is recognized both inside and outside the crypto community. Many people still feel FOMO (fear-of-missing-out) regarding bitcoin purchase at the end of 2018, when the digital currency price decreased by $3,000. Yet, the crypto market has a highly volatile nature, and the cryptocurrency price can change dramatically within the next few months. As of today, the bitcoin price reached $17,887, and the interest in the crypto market has become more intense.

Changelly has been on the market for over five years now and managed to witness all the essential crypto events. In this article, we are going to provide a bitcoin price prediction for the next several years and try to find whether BTC is a good investment or not. Here we go.  

BTC Price Prediction Forecast

It is important to note that price predictions over cryptocurrencies should be seen as recommendations rather than call to action. As we mentioned earlier, the crypto market is incredibly volatile, so that no one will ever tell the exact BTC price for the next several years. However, BTC has been on the market for over a decade, and some experts can provide comprehensive bitcoin predictions based on the currency’s price trend. 

In this article, we will observe a range of BTC price predictions provided by different crypto enthusiasts and bitcoin evangelists. 

Real-Time Price Chart of Bitcoin Price Changes

This November, Bitcoin price fluctuations made users believe that the cryptocurrency could achieve a new all-time-high rate (the previous historical high level was on December 17, 2017, with the price of $20,089 per 1 BTC). The year is not over and, perhaps, BTC can show us its new record at the end of December. 

Bitcoin Outlook: Where We Are Now

bitcoin price history cmc
Source: coinmarketcap.com

Bitcoin Price Prediction for 2020

This year is almost over. In this regard, it is interesting to check whether bitcoin price predictions for 2020 came true or not. 

LongForecast Bitcoin Price Prediction for 2020

According to LongForecast, Bitcoin price should have varied in the range between $6871-9757 in January. Throughout 2020, the BTC price was supposed to reach $9,306 by December 2020. 

DigitalCoinPrice Bitcoin Price Prediction for 2020

According to another price prediction website digitalcoinprice.com, bitcoin price in 2020 was supposed to vary between $18,359 and $42,293. As of December 2020, we can say that this prediction has not met the expectations.   

Bitcoin Price Prediction for 2021

It seems that everyone in the world wishes the next year to be better than 2020. We do hope that 2021 can bring the day of crypto mass adoption one step closer to us. This year was definitely the year of decentralized finance (DeFi). The main theme of 2021 (in terms of crypto) is still unknown, but we are sure that the crypto industry will reveal new features and technological solutions. And the major cryptocurrency will take an essential part in its never-ending development.  

We will observe the most popular and trusted prie prediction websites in order to compare bitcoin price forecasts for 2021. 

DigitalCoinPrice Bitcoin Price Prediction for 2021

DigitalCoinPrice provides quite an optimistic bitcoin price forecast for the next year. According to its algorithm, the BTC price will meet an uptrend, which can be reflected in bitcoin’s value in general. The source predicts the BTC price in 2021 to vary from $37,914.74 and up to $54,238.29. Such a prognosis makes the current BTC price look lucrative for long term investment.  

LongForecast Bitcoin Price Prediction for 2021

On the contrary, LongForecast gives a more realistic bitcoin price prediction for 2021. In this regard, LongForecast expects the BTC price to vary from $15,881 up to $33,379 during the year. 

Long-Term Bitcoin Price Prediction: 2022-2025

Predicting the price of such a volatile entity as cryptocurrency is quite difficult. However, there are several predictions and opinions about long-term bitcoin price. 

DigitalCoinPrice Bitcoin Price Prediction for 2022-2025

The DigitalCoinPrice price predictions tend to be positive (sometimes suspiciously positive). The service provides the following bitcoin price predictions for the next several years. We took the maximum price BTC could gain in 2022-2025

In 2022

1 BTC = $60,345

In 2023

1 BTC = $68,478

In 2024

1 BTC = $50,786

In 2025  

1 BTC = $48,019

LongForecast Bitcoin Price Prediction for 2022-2025

LongForecast provides bitcoin price predictions for the next five years. The BTC price forecast is quite positive, but we might meet some decline in bitcoin price in the middle of 2022. The algorithm suggests BTC may cost $18,968 in July 2022, but the price will go up to $30,575 in October. In 2023, bitcoin price might suffer from strong fluctuations, resulting in BTC price decrease – the value of the main cryptocurrency can probably vary from $13,530 to $26,136. 

Yet, 2024 can get back the cryptocurrency’s price back to the top. According to the bitcoin price prediction for 2024, the BTC price might gain the mark of $47,132 per coin. 2025 will continue to hold BTC price at a high level. There is a chance bitcoin will cost $46,232 at the beginning of 2025. 

Vinny Lingham Price Forecast of Bitcoin

Vinny Lingham, a co-founder of Civic, claims that Bitcoin’s price can range from $100,000 to $1M by 2030.

Tim Draper BTC Price Prediction for 2022

Will Bitcoin keep rising? A billion investor, Tim Draper, says that Bitcoin will hit $250,000 by 2022. According to his words, people would be able to buy coffee for bitcoins in 2021. 

John McAfee’s Price Prediction of Bitcoin

Bitcoin is a real shitcoin, said McAfee antivirus creator John McAfee. He wrote that the future lies with altcoins in his Twitter account since they bypass the first cryptocurrency in technical specifications.

Earlier, he abandoned his $1 million forecasts for Bitcoin, calling it a trick to attract new users.

Stephen Perrenod’s BTC Price Prediction

Analyst Stephen Perrenod believes that the assumption of multiple increases in the price of the first cryptocurrency will occur.

In his blog, the expert proposed a new model for calculating the future Bitcoin exchange rate. Unlike the previous ones, it takes into account not only the shortage of coins that will arise due to the limited issue and halving but also their residual supply.

Based on this, the analyst concluded that, with constant demand, Bitcoin would rise in price against the background of diminishing inflation and rise in price to $77,500 within a decade. However, this figure may increase significantly, possibly even up to $100,000 if the value of the US dollar decreases, Perrenod added.

Conclusion: Bitcoin BTC Price Prediction Forecast

We are looking forward to the future, but no one can tell you the exact BTC price even for a week (we predict, but we are no future-tellers). However, all the bitcoin price predictions mentioned above are based on algorithms and mathematical and statistical prediction methods. The current BTC uptrend might last for the next month or might pivot within hours. In this regard, it is vital to be aware of market movements and DYOR (do your own research) before investing in any digital assets.  

How Has The Price Of Bitcoin Changed In The Past?

The history of the first cryptocurrency is full of ups and downs. It is important to understand the background of the currency in order to predict its behavior in the future. Let’s take a closer look at the bitcoin value trend over the past ten years. 

At the Dawn of Bitcoin

The events that were saturated in 2010 gave an impetus to the first serious growth of bitcoin. It all started with the launch on February 6 of the BitcoinMarket.com crypto exchange, where 1 Bitcoin initially cost $0.003.

This was followed by the first online purchase of a physical product with payment by bitcoins. On May 22, 2010, that same legendary story happened with pizza’s purchase for 10,000 BTC. Jacksonville, Florida resident Laszlo Hanyecz ordered two pizzas from Papa John’s through the Bitcointalk forum, transferring these coins to the user who started the delivery. According to various estimates, at that moment, Hanyecz paid only $25–40 for his order.

buy pizza with bitcoin

A truly significant event took place on July 11. Then Bitcoin was mentioned on the popular news resource Slashdot, which provoked a 10-fold increase in its price over the next five days, from $0.008 to $0.08 for 1 BTC. On the same days (07.17.10), the Mt.Gox exchange was launched, which subsequently was destined to have a fatal influence on the cryptocurrency market repeatedly.

After several months of fluctuation in the range of $0.06–0.07 in early October, Bitcoin’s cost began to overgrow. Within a month (November 6), the BTC rate reached $0.35 on the Bitcoin Market and $0.5 on Mt.Gox. At this point, Bitcoin was worth 16.67 times more expensive than at the beginning of the year, and its capitalization reached $1 million.

BTC Price Fluctuations in 2011-2012

After the rapid growth to $0.5 and the same rapid decline to $0.15, Bitcoin continued to consolidate in the price range of $0.2-0.3 until the beginning of January 2011. Then the rate continues to move upwards, and on February 9, 1 BTC at the cost of $1.

The growing popularity of Bitcoin facilitates this due to its mention in the Hacker News and Twitter, an increase in the number of miners, as well as the launch of the Darknet site Silk Road, where BTC has become the main payment system.

In mid-April, when an essay was published on Bitcoin in TIME magazine, its course finally broke the $1 mark and rose upwards so that it will never return to it.

On June 2, 1 BTC was already worth $10. Over the next six days, a jerk was made to ~ $32 (June 8). After another four days, the exchange rate again fell to $10 and then jumped sharply to $25.

On June 19, the Mt.Gox crypto exchange was hacked, as a result of which hackers stole and made publicly available data from more than 61 thousand exchange customers.

Despite the relatively small losses, the news about this hack took effect, causing Bitcoin to fluctuate seriously on other exchanges.

Then, in the first week of August, the cost of BTC dropped from $15 to $6. After a quick recovery to $12, the summer Bull run’s correction lasted until November, ending at around $2.5.

For the next year and a half, the price of bitcoin was in the accumulation stage with a gradual increase to $14. The only serious depreciation during this period (from $16 to $7) occurred in August 2012.

Bitcoin in 2013-2016

In mid-January 2013, a new cycle of rapid growth in bitcoin’s cost began, which reached its peak on April 11; for $1 BTC is equal to $266.

The new bull run starts at the same level in early November and by the end of the month. The price of bitcoin reaches $1240. This happens against the backdrop of positive news about the acceptance of tuition at one of the universities in Cyprus in bitcoins. Also, the announced support for Bitcoin payments by Zynga, a giant in the field of online game development, has a positive effect.

Started in late 2013, the corrective downward movement of the course became the longest (at that time) in the history of bitcoin. Cryptocurrency winter lasted 411 days until mid-January 2015. During this time, BTC fell 86% from $1240 to $160.

See also

Invest In Ethereum How, Where and When

On February 28, the owner of Mt.Gox, Mark Karpeles, announced at a press conference about the bankruptcy of the exchange and the loss of 744.4 thousand customer bitcoins “due to system deficiencies.” At this point, on the exchange itself, the BTC price dropped to $100.

In early January 2015, the Bitstamp crypto exchange announced the hacking and theft of 19 thousand BTC. At this point, the Bitcoin rate drops to $170, but after the resumption of the work of the exchange, it begins to recover, reaching $300 in late January. Then begins a long period of consolidation in the range of $200-300.

In early August, hackers broke into the Bitfinex exchange and stole 120,000 BTC. The price drops below $500 for a short time, and then, until the end of October, the exchange rate flies around $600.

Then, by the end of the year, steady growth is observed at up to $1,000.

Bitcoin Bull Run in 2017

In early January 2017, the cost of bitcoin for the first time since the end of 2013 reached $1,150 but then fell to $750 during the week. By mid-March, the course is storming new heights, briefly reaching $1,300-1,350. By the end of March, the price of BTC drops to $900, but within a month, it finally breaks the level of $1,350. In the last weeks of May, bitcoin is trading at $2,500-2,600, then adjusted to $1,800, so that in the first decade of June, it comes close to $3,000.

The course growth is facilitated by the rapid increase in the number of network users and bitcoin recognition as a legal tender by many companies and financial institutions around the world. An important role was also played by the opportunity given to BTC holders to receive Bitcoin Cash (BCH) coins for free due to a hard fork on August 1.

Then, on the news of the launch of BTC futures by major US exchanges, almost recoilless rapid growth begins, and on December 7, bitcoin is trading at $16,500.

Correction in 2018

Throughout 2018, a correction of the rapid BTC-bull run of 2017 has been observed. The maximum BTC rate in 2018 was a mark of $17,000. The subsequent fall is again accompanied by a fling of negative news from Korea, where authorities have advocated banning the anonymous trading of cryptocurrencies.

The fall in the rate continues until the beginning of February and reaches a minimum of the 6th day ($6000). Unfortunately, the breakdown of the bearish trend does not occur, and from this mark, the exchange rate rises again and drops to $5,800 by the end of June. Over the next 4.5 months, the Bitcoin chart continues to draw a triangle that has already become obvious to many, with a lower face in the region of $6,000.

After a slight rebound, the price continues to move down and on December 15 reaches an annual minimum of $3,200. Then, within 3 days, the price of bitcoin again returns to the region of $4,200.

Until the beginning of February 2019, the price continued to move in a downward corridor, for which the resistance became the level of $3,300.

On April 2, a breakdown of the level of $4,200 takes place and within a few hours, the price of bitcoin reaches $5,100. Subsequently, the news appears that the reason for this was the purchase by one buyer on several exchanges of 20 thousand bitcoins at once. Many consider this a signal of the return of major players to the market.

The rise of BTC in 2019 happened in June. The highest price was $13,275. The price increase may be due to the launch of bitcoin futures. This type of trading became popular in 2019. Since then, the price of bitcoin has been falling throughout the year.

What Factors Affect The Price Of Bitcoin

There are many factors that might affect the price of bitcoin. The crypto news as well as news outside the world of cryptocurrencies may influence the state of bitcoin’s price. Back in spring 2020, when the whole world was put on quarantine due to the COVID-19 situation, the BTC price decreased together with the rest of the stock market. 

Moreover, BTC met its third halving this year. This means that the bitcoin block reward was cut from 12.5 BTC per block to 6.5 BTC per one mined block. Such an important event also has an impact on BTC price. Technically, 

Supply and Demand

There are 21,000,000 BTC. The circulating and total bitcoin supplies are the same 18,567,418 BTC (as of December 10, 2020).

Market Competition

Bitcoin is currently the leading cryptocurrency in the industry in terms of market capitalization and monthly volume. The second place by the market cap criteria takes Ethereum (ETH). 

By the way, read our Ethereum Price Prediction for 2020-2025.

Key Things of When Trading Bitcoin

Unlike the regular stock market, the crypto market is open 24/7. A trader should do the research to figure out the right time to day trade BTC. For a more comprehensive answer, we suggest you read the article Invest in Bitcoin: how, where and when.

Bitcoin Price Prediction — FAQs

Is Bitcoin a Good Investment?

Considering all the factors mentioned above, the answer to the question – Is bitcoin a good investment? – will be positive. Bitcoin is the first and major cryptocurrency in the industry. Many digital assets are Bitcoin forks, so in that way, BTC will always be a relevant investment option. 

What Will Be Bitcoin Worth in 2030?

There is no definitive answer to such a question. According to different bitcoin price prediction services, BTC might gain an all-time-high next year. Consequently, the BTC price will grow and meet the downtrend occasionally. There is a possibility that the BTC price in 2030 will be over $30,000 per coin. 

How Much Does It Take to Invest in Bitcoin?

As of now, the price of one BTC is $17,887. However, if you want to invest in bitcoin, you can easily buy 0,004 BTC. For example, you invest $150 and get 0.00751 BTC. Mind also that you can instantly buy BTC with your credit card, bank transfer, or Apple Pay on Changelly.

Will Bitcoin Ever Die?

Obviously, there are also two possibilities: BTC will either die or not in the future. The current BTC trend promises a bright future for the first cryptocurrency. However, you never know what brings tomorrow. As of now, it is doubtful that BTC will die in the near future. 

How Many Bitcoin Tokens Are Left?

Bitcoin has a maximum supply of 21,000,000 BTC. As of December 10, 2020, there are 18,566,543 BTC in circulation, which means there are 2,433,457 BTC of ‘spare tokens.’ 

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Crypto exchange BTCNEXT seeking Japan license

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BTCNEXT, an Asian based cryptocurrency exchange, earlier this month announced it received notification from the Japan Financial Services Agency (FSA) that it must suspend services for Japanese residents.

As part of Noah Ark Technologies Ltd., BTCNEXT operates with a Virtual Currency Exchange license issued by the Cagayan special economic zone and Freeport Philippines.

The BTCNEXT team says that its legal department is currently working with the FSA in regards to getting a Japanese license and will take necessary steps to ensure full compliance with all FSA requests.

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NEO Price Prediction: Long-term (NEO) Value Forecast – June 2

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  • The long-term outlook is in a bullish trend.
  • The 1.618 in the fibs at $19.17 is the bulls target in the long-term.

NEO/USD Long-term Trend: Bullish

Supply zone: $20.00, $30.00, $40.00
Demand zone: $2.00, $1.00, $0.50

NEO continues in the uptrend in its long-term outlook. The strong pressure on the cryptocurrency by the bulls’ comeback at the 61.8 on 18th May has kept price up with new high each week. $12.59 and $15.04 in the supply area were the highs on 20th and 30th May respectively.

The new week is started on a bullish note with today’s opening candle at $13.72 higher than last week opening price at $11.45, an indication that the bulls are more in the market.

Price is above the two EMAs that are fanned apart which suggest strength in the trend and in this case the uptrend.

The journey to 1.618 of the fib extension with price at $19.17 in the supply area is the bulls target in the long-term as the bullish momentum increase and more bullish candle open and closed above the two EMAS.

The views and opinion as expressed here do not reflect that of BitcoinExchangeGuide.com and do not constitute financial advice. Always do your own research.

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Why Bitcoin’s ‘Culture War’ Matters

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Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.


Let’s talk about bitcoin, toxicity and inclusiveness.

(Boy, my Twitter feed is going to have fun over the next few days.)

To start with, let me take a position: I stand with those people, especially women, who’ve lately been calling out maltreatment from members of the bitcoin community and citing rude and abusive behavior as proof of that community’s lack of inclusiveness. These are people who believe in cryptocurrency technology’s potential but feel discouraged to believe that they belong to the community’s dominant white-male subculture. If this technology is to fulfill its global potential, the community associated with it must confront this problem.

But the real point of this column is not to just defend these critics. It’s to debunk one of the more common positions adopted by those who take issue with their complaints, particularly on Twitter. In doing so, I hope to emphasize just how important the concepts of “community” and “culture” are to the healthy development of crypto technology and the ecosystem growing around it.

Hammer culture?

The line that’s most often thrown back at those calling out incivility is that bitcoin is nothing more than a technology, a tool, and that it’s meaningless to attach to it value judgments relating to human behavior. Bitcoin is amoral, apolitical and a-cultural, the argument goes, and like any technology it is used by good and bad people alike.

These pundits, warning of a political correctness-based threat to free speech, will then advise the injured party to take issue directly with the bad actors but refrain from agitating for community-wide change.

A perfect example of the genre came from outspoken lawyer Preston Byrne.

Clever, yes. But it’s extremely unhelpful, because the examples given do not share equivalent terms of reference.

Byrne’s “hammer” refers solely to the steel implement that tradesmen use. By contrast, people complaining about “bitcoin” are clearly using the word in a much wider context than in merely a reference to the code, to the ones and zeros that comprise the bitcoin protocol. They are inherently talking about the wider ecosystem and community gathered around the idea of bitcoin.

So, let’s equalize the terms, shall we? We can turn each of these nouns into a modifier of the word “community.”

While it might sound silly to talk about a “hammer community,” there may well be groups of hammer-obsessed souls who debate questions of design and ease of use at meetups and in chat rooms. If so, I’m going to guess that that community would probably also be predominantly male.

But the real issue is that such a hammer community is going to be far less important to the future design and evolution of hammer technology than bitcoin’s community is to its. I’m no expert, but I don’t see a great deal of change in hammer technology having occurred over the centuries and I’m not sure people expect much in the future. As such, we don’t see much jockeying among users to ensure that proposals for hammer upgrades are implemented and standardized to their preferred design.

By contrast, the open-source technology behind bitcoin is in a constant state of evolution. It is, by definition, under development, which is why we talk about the engineers who work on it as “developers,” not “custodians.” As such, there is a constant battle of interests over who gets to modify the code. Exhibit A: the block-size debate.

Counter-arguing that those who don’t like the process can just fork the code, as the large-blockers did, and set up their own new community, doesn’t cut it for me. Bitcoin is the brand that matters. Any newcomer will struggle to achieve the same network effects. Secession just isn’t viable for anyone who likes its current design but doesn’t like how its future is being defined.

Also, is there a “hammer ecosystem?” Maybe. But beyond producers of nails, and perhaps steel and rubber or wood suppliers, you can hardly call it a complex ecosystem.

Bitcoin, by contrast, which purports to reinvent the global system of money, has attracted an inherently vast array of different technology providers, all of whom have competing interests in how it is designed, managed and marketed to the world. I’m not just talking about businesses applications built on top of it, but also the developers of related encryption, payment channel, smart contract and other vitally important technologies, all of which are themselves in a constant state of flux.

(I’m guessing that the exhibition halls at hammer conventions don’t have quite the same spread of offerings as cryptocurrency events such as Consensus.)

Saying that bitcoin is nothing but a tool, is like saying that music is nothing but a system for ordering different audible tones.

Money = community

When Paul Vigna and I wrote The Age of Cryptocurrency, we spent a lot of time chronicling the emergence of the community that had formed around bitcoin, which we saw as fundamental to its success. It struck us that the notion of a bitcoin community was so prominent — the “c” word was always being bandied about — because bitcoin embodied a profound and sweeping social idea. It offered nothing less than a reinvention of money, a revolution in the entire system for coordinating human value exchange.

Money only works to the extent that there is widespread belief in it, that people buy into its core myth. Money, Felix Martin says, is a social technology, by which he means that its functionality and usability depend far less on the physical qualities of the token that represents it than on the collective agreement among large communities of people that their token captures, represents and communicates transferable value. This is true whether we’re talking about gold, dollar bills, entries in a bank account, or cryptocurrency.

By extension, then, for any form of money to succeed, it must sustain a vibrant, growing community.

Communities = culture

The thing about communities is that they inevitably develop cultures. In self-defining their boundaries of belonging, they develop shared ways of seeing and language — akin to a kind of social protocol – that regulate (in a very unofficial, and quite subconscious way) their members’ behavior.

As they evolve, cultures can become more or less open, more or less inclusive, more or less abrasive in their treatment of outsiders. And inevitably, these cultural features will either encourage or impede the growth of the community.

All this should hardly be a revelation. Anthropology, the study of culture, is a globally widespread and influential field (one that is now appropriately turning its attention to cryptocurrency communities.)

Studies of U.S. culture, from Alexis de Tocqueville down, have rightly pointed to the inclusiveness of the founding fathers’ ideas as a key driver of its economic expansion. In fact, American culture is arguably its most important ingredient for success, a social manifestation of Joseph Nye’s notion of the United States’ “soft power.”

So, yes, bitcoin culture really, really matters. If the compelling ideas behind permissionless, peer-to-peer exchange and censorship-resistant money that attract people of all stripes to it are to retain those people’s interest and grow in influence, the bitcoin community needs to evolve a more inclusive culture.

The only way to do that is to spur the kind of open debates that have always driven the progress of human culture — those which shifted norms and mores to the point that it became unacceptable to own slaves, to spit in public, or to jump a queue.

So, listen up, bitcoin. It’s time to confront your toxicity.

Hazard drums image via Shutterstock

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Holiday Spending up 14.6% as E-Commerce Beats Brick-and-Mortar

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E-commerce sales hit record highs this year as Americans continue to move their holiday shopping online.

According to Mastercard’s SpendingPulse report, online retail grew 18.8% over last year’s holiday season. That’s enough to make online sales a record 14.6% of holiday shoppers total spend, the report says.

Online consumers this year spent 17% more on apparel, 8.8% more on jewelry, 10.7% more on electronics, and 6.9% more at department stores. 

Overall, holiday spending jumped 3.4% compared to 2018.

The strong numbers came in spite of 2019’s unusually short holiday season, commonly defined as the period between Thanksgiving and Christmas. Shoppers had six days fewer than they had in 2018.

Steve Sadove, an advisor for MasterCard, said in a press release that retailers adapted to the shortened season. 

“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”

Interestingly – or ominously – retailers who accepted crypto or managed crypto payments were slow to respond when we asked them how their holiday shopping season went. eGifter, a gift card trading service, noted that it had not yet “crunched the numbers” on holiday sales but that “We saw growth in overall crypto sales,” said Bill Egan, the site’s VP of Marketing.

“We saw more gifting with crypto in 2019, compared to buy-for-self use cases in prior years,” he said.

Payment processor BitPay found the holidays quite inspiring as well.

“We saw twice our daily averages of processed volume leading up to the holiday,” said BitPay’s CMO, Bill Zielke.

It will be interesting to see what kind of statistics surface over the next few seasons as e-commerce becomes king and crypto payments come to the fore.

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Custodians Grapple With Germany’s New Rules

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Crypto firms in Germany are getting ready to exist under a new regime. 

Under a law going into effect Jan. 1 requiring digital asset custodians to be licensed, each company that currently custodies crypto and targets German clients must announce to Germany’s Financial Supervisory Authority (BaFin) its intention to get a license before April 1 and submit an application before Nov. 1.  

A clause allows current crypto custodians to keep serving German customers without being penalized if they declare their intent to apply, but those same companies are waiting on BaFin to release final regulations around the law.

“As long as the legislation is not in place, BaFin is not going to think about how to cope or how to deal with the legislation,” said BaFin press officer Norbert Pieper. The regulator declined further comment and Germany’s Federal Ministry of Finance did not respond to request for comment by press time.

Pieper added: “There is no date foreseeable [yet] by which we’ll be able to communicate the results of our assessment. We will certainly communicate that on our website.” 

While the final regulations haven’t been set yet, the new license requirement may not produce the same kind of exodus of crypto firms that New York saw after the BitLicense requirement, said Miha Grčar, head of business development at Bitstamp.

London-based Bitstamp, one of Europe’s largest crypto exchanges, plans to continue operating in Germany but declined to say whether it would apply for a license, said Grčar. Crypto firms could also use a white-labeled custody service to operate in Germany. 

Because the law is an “updated version of the existing banking regulation,” banks will likely have the most to gain from it, Grčar added. Companies that get the license will be German financial institutions, but not classified as banks.

The law also means that German regulators now see crypto as a “legitimate” industry, he said. 

Ulli Spankowski, chief digital officer and managing director of the crypto custody subsidiary of German stock exchange Boerse Stuttgart, called Blocknox, sees the license as a step forward for “the professionalism of the industry.” The subsidiary has already advised BaFin that it plans to apply.  

“There are other countries that won’t go for a full-fledged license,” he said. “If you want to get traditional, established players from the banking side, you need to give them this environment to feel safe.” 

DLC group is taking advantage of the new regulatory framework by offering consulting services for firms interested in applying, and its own white-labeled crypto custody service. 

Sven Hildebrandt, head of Distributed Ledger Consulting Group, is concerned some exchanges won’t understand the nuances of the new law.

“The law is only in German and no English translation of the law is out there,” he said. “What’s going to happen to exchanges? [Operating without a licence] is actually a felony and not a misdemeanor so that’s jail time.”

Hildebrandt predicts the costs of licensing will be similar to other German financial services licenses where firms will need two managing directors, an established German entity and 125,000 euros of starting capital. He also estimates installation will cost 250,000 to 350,000 euros and recurring yearly costs will be 350,000 euros. 

Switzerland-based Crypto Storage AG, a subsidiary of Crypto Finance AG, is opening a branch in Germany to offer crypto custody to banks and then financial technology startups. 

“Large banking houses will do custody business in the future,” Stijn Vander Straeten, CEO of Crypto Storage AG, said. “They are moving slowly, though. We’ll build it up now for a premium.” 

Berlin-based solarisBank this month opened a subsidiary called solaris Digital Assets to offer crypto custody as a service. So far, the bank has a handful of customers testing the service with more than 40 companies in the pipeline, said Alexis Hamel, managing director of solaris Digital Assets.

In addition to waiting for details from BaFin, crypto firms are also waiting to see if the law can be passported to other European Union states. 

“Germany is definitely at the forefront with the clearer regulation,” Hamel said. “We still need to see how other European countries level up.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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