5 Recent Developments in Cryptocurrency
Cryptocurrency has become all the rage in mainstream media. You’ll see numerous financial analysts discussing whether cryptocurrency is here to last. Go online, and you’ll see people debating about which cryptocurrency or altcoin is likely to generate astronomical returns on investment.
Although cryptocurrencies have been around for a while, its popularity has skyrocketed over the past few years. Bitcoin was the first cryptocurrency released in 2009. Shortly after, other cryptocurrencies followed. Various reasons have contributed to cryptocurrencies becoming more widely adopted than before. Principally, increased awareness and market demand are the primary contributors.
Many people saw early adopters of cryptocurrency – primarily Bitcoin – become millionaires. As a result, cryptocurrency attracted more attention. However, while people might have come for investment purposes, they quickly realized that cryptocurrencies and the underlying blockchain technology had more to offer. Generally, cryptocurrencies are decentralized. In some instances, you can use them to purchase goods and services. If that’s not what you’re into, you can also trade cryptocurrencies.
While cryptocurrencies still exhibit wild volatility, you’ve got to remember that these currencies are still barely out of infancy. As a result, their adoption is gradually increasing. Moreover, every passing year brings game-changing developments in the cryptocurrency world. We’ll discuss some of the recent and important cryptocurrency developments in this blog post.
Recent Cryptocurrency Developments
Here are some recent developments that have been sending shockwaves throughout the cryptocurrency world. They include:
Tesla Accepts Bitcoin
In February 2021, Tesla announced it would start accepting Bitcoin as a payment method. Cryptocurrency holders rejoiced after hearing the news because it signaled more widespread adoption. In addition, the company also purchased $1.5 billion worth of Bitcoin. As a result, Bitcoin’s price surged through the roof, hitting a peak as at then, of $44,200. Tesla’s shares also jumped by 2 percent following the announcement.
However, Tesla investors and environmental activists didn’t respond favorably to the news. They cited environmental concerns that arise because of the mining process behind Bitcoin. Tesla CEO Elon Musk initially didn’t pay any heed to these concerns. However, after a few days, he announced that Tesla wouldn’t be accepting Bitcoin because of the environmental impact, which led to a sharp drop in its price.
Since then, Musk has reiterated that he would be willing to accept Bitcoin if miners adopt renewable energy sources for mining. He stated that Tesla would resume accepting Bitcoin if the miners’ renewable energy usage was at least 50 percent or higher. Following Musk’s comments, Bitcoin again rose by 6 percent, reaching $31,952. The news also resulted in Ethereum rising by 10.6 percent.
PayPal Offers Crypto Functionality
Cryptocurrency adopters celebrated a massive victory when PayPal announced it would be supporting cryptocurrency. Earlier this year, PayPal declared that it would enable US-based users to buy, sell, hold, and checkout with cryptocurrencies using PayPal. The platform currently only offers this functionality for personal and premium accounts. Those users with a business account can’t utilize this feature. However, cryptocurrency holders considered this a win. They believed it indicated wider cryptocurrency adoption was on the brink. PayPal currently supports four cryptocurrencies, including Bitcoin, Litecoin, Ethereum, and Bitcoin Cash.
PayPal’s mobile application also grants users the ability to learn more about crypto and track cryptocurrency prices without exiting the application. PayPal has announced that it plans to extend this feature to global markets in the near future. However, the company hasn’t provided a concrete timeline yet.
The Crypto Council of Innovation
April 2021 also saw the launch of The Crypto Council for Innovation. The council comprises some of the leading crypto member organizations like Paradigm, Coinbase, Fidelity Digital Assets, and Square Inc. The council aims to bridge the disconnect between governments and the crypto world. The council announced plans to support governments and institutions worldwide. It would do so by advising on responsible cryptocurrency policies and raising awareness about cryptocurrency.
In addition, the council also plans to develop an extensive catalog of resources that enable policymakers, world leaders, crypto enthusiasts, and the general public to improve their understanding of the crypto world.
Morgan Stanley’s Bitcoin Venture
Investment bank Morgan Stanley also announced plans to offer clients access to bitcoin funds. The bank stated that it was reserving its policy only for high-net-worth individuals because they considered Bitcoin suitable for people with aggressive risk tolerance. Morgan Stanley stated that since Bitcoin is a volatile asset, the option to access Bitcoin funds would only be available to people with more than $2 million in assets at the firm.
El Salvador Adopts Bitcoin
On 8th June 2021, the Legislative Assembly of El Salvador passed the Bitcoin Law. The law gave Bitcoin legal tender status within El Salvador effective after 7th September 2021. The law meant that Bitcoin became an official currency within El Salvador alongside the US Dollar. The law enabled people to use Bitcoin to purchase goods and services. Moreover, the law meant that recipients now had legal obligations to accept the currency. The El Salvadorian government also added Bitcoin to its reserves. By 27th October 2021, the government held more than 1,120 Bitcoins in its official reserves. It remains to be seen how the experiment plays out. However, statistics show the El Salvadorian people weren’t in support of the idea. According to El Salvador’s Chamber of Commerce, more than 93 percent of the populace opposed adopting Bitcoin as legal tender.
The World Bank has since refused to help El Salvador implement Bitcoin. They cited Bitcoin’s volatility as making it unsuitable for daily transactions. Moreover, the World Bank raised concerns about the environmental impact adopting Bitcoin would cause. Likewise, they also cited transparency issues as being a significant challenge moving forward.
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