At the start of the year you might have checked my predictions for the year 2021. Those predictions were more of a general nature, but now we can see even more clearly that in the tech industry and fintech industry especially, we are now facing two trends shaping this transformative year.
The first one is related to the fact that we entered the second year of pandemic. The virus will affect the business and private life in Europe throughout 2021 with temporary restrictions still being applied. Vaccination programs are in place, but the progress is slower than expected. Vaccines may not be as effective against new variants of the virus. Remote office will therefore remain the main form of work with many business sectors. This will have a significant impact towards the real estate and transportation market. We may hope to reach the “new normal” no sooner than spring 2022. There are still many questions on how the society but also the economy and our private lives will look like in this decade.
The second trend, which started already two or three years ago, are digital currencies. More and more central bankers talk about central bank digital currencies. Just a few days ago Christine Lagarde, the chairwoman of European Central Bank stated that the ECB expects a digital euro in the timeframe of five years. This will of course cause several transitional challenges. China is launching its own central bank digital currencies with pilot projects already underway. Beijing is also building a national blockchain network and we may expect that other countries may follow.
On the private sector side, Facebook will likely undertake another effort to launch its digital currency. Diem will launch first in Europe using the Swiss legal framework.
Prices of cryptocurrencies reached recently all-time highs. If you ask me, I think this is an expression of another asset bubble waiting to burst, fueled by loose monetary policies of almost all central banks across the world. Still, there are some who believe that sky - or better to say energy prices - are the only limits of how much bitcoin and similar currencies may cost in the future. Unfortunately, I do not possess a crystal ball. Even if I do possess a very small quantity of bitcoin, this is more for research and following crypto development rather than to create my own portfolio. Please don't take this as any recommendation - because I may be completely wrong in both ways!
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