Last year, the team at OSL and BC Group made several predictions about the digital asset market in 2020. Many of these came to fruition, with further institutional endorsement from the likes of Paul Tudor-Jones and Stanley Druckenmiller, major financial institutions such as DBS announcing large-scale digital asset projects, an influx of reliable digital asset custodians into the market, and the beginning of a consolidation of unregulated retail players under new regulations and rules in major financial centers.
Bitcoin experienced its third halving event in May, and big names such as MassMutual, PayPal, Square and listed company MicroStrategy bet heavily on the asset over the course of the rest of the year, and BTC hit a new all-time high above 29,000 during Asian trading hours today (December 31) with strong momentum.
OSL was also a key player in the development of the global digital asset market during the year. On 15 December, it became the first company to be granted licenses for Types 1 & 7 regulated activities specific to digital assets by Hong Kong’s Securities and Futures Commission.
The year ahead promises to be an exciting one, and we share our predictions for 2021 below:
Regulatory - BC Group CEO Hugh Madden
A major financial center in the United States will regulate security tokens and other digital securities under existing laws. Around the same time, the US Congress will pass sweeping national legislation on industry standards and practices for trading - and allowing the creation of new digital financial products.
Stablecoins - BC Group Executive Director Dave Chapman
The dollar-backed Diem stablecoin will finally launch in Q1, albeit after further delays. It will expedite the introduction of digital assets to a large number of users in a matter of days, and will pave the way towards its original proposal of a multi-currency backed Diem to launch later in the year, bringing digital assets to billions of people around the globe.
A ‘Changing-of-the-Guard’ event will occur, and the market cap of regulated stablecoins will increase exponentially.
Bitcoin price - OSL Global Head of Trading Ryan Rabaglia
The new US government stimulus package will bolster markets, but Americans who are still stuck at home under restrictions will mistrust government money printing and pump their cheques into digital assets. Institutions, which have spent the better part of 2020 looking for access to Bitcoin and other tokens, will invest en masse in 1H 2021 - pushing the price of Bitcoin to over USD50,000.
With the growth of the sector and the continued institutional appetite for digital assets, the overall digital asset market cap will exceed $1 trillion.
CBDCs - BC Group Head of Regulatory Affairs Gary Tiu
China will continue to roll out the DCEP across its test regions with widespread success, leading to its use in Hong Kong and the creation of a HKD-backed stablecoin that can be traded against the DCEP. This success, coupled with the massive uptake of the Diem stablecoin by Facebook users across the globe, will force the US government to finally and hastily create the long-rumored ‘digital dollar.’
Adoption - OSL CEO Wayne Trench
If 2020 was the year of regulatory clarity, 2021 will be the year of institutional adoption of Bitcoin and other digital assets on a global stage. Participation by major multinationals such as PayPal, Facebook and others has been very positive for the space. However, we expect to see continued accelerated and direct institutional investment into digital assets as well as ‘picks and shovels’ infrastructure companies such as OSL. This institutionalisation of the ecosystem will be key to laying the platform for widespread mainstream adoption in the future.
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