If you keep track of what is going on in the financial markets, you probably know that Bitcoin has been on the rise recently. Not only did it hit several all-time highs last week but also reached a milestone of a $1 trillion market cap. At the time of writing, Bitcoin is worth over $56,000, up from about just $6,000 in April 2020. It is sometimes referred to as “digital gold,” and many individuals and institutions believe it may well become the future of money. How does it affect other cryptocurrencies? And what does the rise in Bitcoin’s popularity mean for the blockchain development industry as a whole? Let’s dive right into it!
Not long ago (some 12 years), Bitcoin was no more than an idea. Today, one can buy a small house with it. The spectacular rise of the most popular cryptocurrency has mesmerized governments and businesses around the world while also frustrating your poor friend who sold all his Bitcoin in 2019.
While Bitcoin is undoubtedly the most trendy crypto today, there are other virtual currencies that are being actively traded these days. Some of the alternative crypto assets have shown much larger increases than Bitcoin – take Dogecoin as an example, a meme coin that has seen a spike of over 2000% during the last few months after Elon Musk, the Tesla CEO and SpaceX chief posted a couple of tweets about this joke cryptocurrency. Jokes aside — there are quite a few “serious” coins that attract a lot of attention these days. Among others, the most popular cryptocurrencies are Ethereum, Litecoin, Ripple, NEO, and IOTA.
In itself, Bitcoin is not a tech solution for the development and has some deficiencies as a currency — namely, payments in bitcoin can be quite slow and expensive. However, as it becomes mainstream, the whole crypto industry attracts the eyeballs of both individuals and large institutions.
While attention from individuals means more retail investments and increased overall awareness, a more significant consequence of the recent price rally is that even established financial players have begun to show real interest in crypto. And that means a lot — especially in terms of money. Tesla announced it was investing in crypto, bought $1.5 billion in Bitcoin, and plans to accept the digital currency as payment (on a limited basis, though); Hashed, a Seoul-based blockchain investment group, has raised $120 million for its crypto fund; and Morgan Stanley may bet on bitcoin in $150 billion (!) investment arm. Moreover, even such a traditional financial institution as the oldest bank in the United States BNY Mellon announced it was planning to handle Bitcoin payments for its clients. Mastercard said it would support cryptocurrencies (not just Bitcoin) later in 2021. And that’s just the beginning!
The growing interest in Bitcoin and altcoins indicates that the public is not quite satisfied with traditional money management — especially in developing African countries such as Nigeria, South Africa, Namibia, and Marocco. We’ve recently published an article on the future of crypto — and our take on this is that as better solutions emerge, it’s becoming increasingly likely that blockchain and crypto will turn into household names in the future.
Thus, with all the recent Bitcoin price rally, startups focused on blockchain development (especially those into digital currencies) are becoming more relevant than ever. Sure, the question of whether we need crypto in our everyday activities remains, but the more it gains awareness and prevalence, the more it becomes relevant. So there is little reason not to be bullish right now.
At the same time, the rapid growth of Bitcoin and other cryptocurrencies affects not only the expectations of blockchain-related software development companies. The presence of Bitcoin, Ethereum, Ripple, and other coins in the asset management portfolio allows investors to rely on bigger funds for other areas.
A blockchain development company ourselves, we at Idealogic always keep abreast of what is going on in the market. Today, with all those outstanding demand fluctuations and the overall bullishness on Bitcoin, we can say for sure that the interest in blockchain technology is gaining momentum.
Our team has already faced the trend among our existing clients to continue improving their products because of additional funds that appeared because of the Bitcoin price change. Although most of our projects are related to the fintech industry, we also noticed a strong interest of investors with crypto funds towards healthcare innovations which would hopefully help to boost the merged area of blockchain and healthcare.
An important point to mention though is that we have recently seen a shift in the type of customers and the product they want. While startups used to be the main clients on the custom blockchain development market a few years ago, they now take second place to larger enterprise-level players. Big companies are starting to understand that blockchain technology is not a child’s play and may actually be of great use for them, so they make more asks for custom blockchain development to meet their needs. Thus, the industry has shifted from small clients to larger ones — that means a more serious attitude combined with access to deeper pockets.
So does Bitcoin growth boost blockchain development? Yes, it sure does. As Bitcoin is seeing a stellar upward trend, attention and, thus, interest goes into the adjacent areas as well. Individuals have become more engaged in retail investing, large institutions are finding new ways of making a killing while facilitating their activities, and businesses are eagerly tapping blockchain technology for their benefit. At the same time, it is worth mentioning that blockchain software development has become more crystallized and free from the ICO scam age. This trend definitely helps this technology to find a decent place under the sun.