Evaluation of “Blockchain Outlook — Beginning 2021”


The year is slowly coming to an end and it’s time to look at my Blockchain Outlook for early 2021 written at the end of December 2020. [1]
The article will focus on the two biggest cryptocurrencies (in market-cap) Bitcoin and Ether, as well as on public policy in Germany and Europe. What I predicted for 2021, and what actually happened.

I started in the last article with the quote, that you are always wrong; the question is, a little or a lot. [2] Of course, I was wrong with some parts that I wrote on December 29, 2020, too.

Developments in the Blockchain Ecosystem

I. Cryptocurrencies

1. Bitcoin

In December 2020 Bitcoin marked a new all-time high with a price of $28,000. Price speculations at that time for 2021 were $50,000. Now we just reached a new all-time high at $67,000. [3] The price rally is still driven by institutional investors, the launch of the first Bitcoin ETF by ProShares (but just with futures as underlying, not actual Bitcoin) [4], and retail investors, too. But what is more important than the price speculations is the adoption and increased interest in the largest cryptocurrency. El Salvador made Bitcoin a legal tender and citizens can now pay easily in Bitcoin with the Lightning Network [5].
I think we will see other (bigger) countries, that will go the same way.

2. Ether & Ethereum

Like last year, Ether outperformed Bitcoin year-to-date by a lot (more than 4x). [6] It’s maybe partially driven because of the upcoming change to Proof of Stake (PoS) instead of Proof of Work (Pow). But when will it finally happen, is still unclear. We have seen an NFT-hype, and that takes place mainly on the Ethereum-Blockchain. This could be seen as a main price driver.

II. Public Policy

1. Cryptocurrency taxation

I stated that taxation of cryptocurrencies is an important and ambiguous issue, and that we need clear guidelines how to tax the profits made from cryptocurrency trades. We don’t have fixed rules yet, but there is a draft letter from the Federal Ministry of Finance“Individual questions on the income tax treatment of virtual currencies and tokens”. In the 20-page draft we can see what the future of crypto-taxation will probably look like. The 1-year speculation period will still exist, if you don’t generate any income from the cryptocurrency (like lending, staking, etc.). Taxation of Mining, ICOs, Forks, and Airdrops are although clarified in the draft. [7]
Nevertheless, the draft has yet to become (at least) an actual letter from the Federal Ministry of Finance.

2. Digital Euro

It is still unclear, how the Digital Euro will look like in the end. Probably it will not be anonymous, and not programmable (like Ether). The ECB has now announced 30 members of the Digital Euro Market Advisory Group. Those senior business professionals with proven experience will advise the Eurosystem on design and distribution of the potential digital euro. Meetings of the group will be held at least quarterly, starting in November 2021. [8] It will still take a couple of years until the digital currency becomes reality, if at all. Until then we will probably be far behind China, the U.S., even Africa and other jurisdictions.

3. Electronic securities (eWpG)

The bill to modernize German securities law was passed in the Bundestag. [9] The flaws that startups and blockchain companies could not have the opportunity to hold electronic securities in custody was fixed. All in all, a good regulation was passed according to my point of view.

4. Markets in Crypto-Assets (MiCA)

What I wrote last year is still applicable. For Europe to emerge as a leader in blockchain, the legislator has an important task to turn unsolved challenges into opportunities for innovation. The Markets in Crypto-Assets (MiCA) proposal from the EU Commission plans to regulate crypto assets and the blockchain ecosystem at a European level. [10]
For European legislation, the MiCA was drafted fast and maybe in some regards, like European stable coins, too fast. It’s still some time to maybe change parts of it; but I don’t think European stable coins will be better off — so US-dollar pegged stable coins will still lead the market, with a 99% market share.

5. Crypto Asset Transfer Ordinance (Kryptowertetransferverordnung)

The “Crypto Aasset Transfer Ordinance” is a new regulation, which wasn’t mentioned in my previous article. The ordinance on enhanced due diligence for the transfer of crypto assets was passed a bit in silence. [11] Although there was a draft on which comments could be made, the ordinance was adopted almost in its initial version. Since it is an ordinance, it did not have to be passed in the Bundestag but could be issued by the Federal Ministry of Finance. So, the political party “to be blamed” is the SPD, and with it probably the new German chancellor Olaf Scholz (who signed the ordinance). A lot of organizations tried to lobby against it, and argued we should wait for the European regulation, which will come soon and will override the German ordinance anyway. With it now in place a lot of companies — young and matured — will have a lot of extra-work to do. The stated aim is to curb money laundering and terrorist financing. That cryptocurrencies are used on a large scale for these purposes, however, has already been refuted by other German organizations.


As mentioned in my previous article, the Blockchain ecosystem is always changing. A lot has happened in the last 10 months, both for cryptocurrencies regarding price changes and adoption, as well as for public policy in Germany. What’s for sure is that a lot will happen and change in the future.

Again, nearly one year has passed, but it’s still not too late to get into the rabbit hole. Educate yourself and try to learn as much as possible about cryptocurrencies such as Bitcoin and Blockchain Technology.

Disclosure: I am personally invested in Bitcoin and Ether, but this is in no way a solicitation to buy cryptocurrencies or to be used as financial advice.


[1] Philipp Hartmannsgruber, “Blockchain Outlook — Beginning 2021”, 12/29/2020, https://pjah.medium.com/blockchain-outlook-beginning-2021-560614cfecc2

[2] Dr. Alexander von Frankenberg, Managing Director of HTGF, The High-Tech Gründerfonds

[3] CoinMarketCap, Bitcoin, visited 10/26/2021, https://coinmarketcap.com/currencies/bitcoin/

[4] ProShares, Bitcoin Strategy ETF, visited 10/26/2021, https://www.proshares.com/funds/bito.html

[5] Presidencia de la República de El Salvador, “Los ojos del mundo están sobre El Salvador, que inicia una nueva era en su economía con la circulación del bitcóin“, 09/06/2021, https://www.presidencia.gob.sv/los-ojos-del-mundo-estan-sobre-el-salvador-que-inicia-una-nueva-era-en-su-economia-con-la-circulacion-del-bitcoin/

[6] CoinMarketCap, Ethereum, visited 10/26/2021, https://coinmarketcap.com/currencies/ethereum/

[7] Bundesministerium der Finanzen, Oberste Finanzbehörden der Länder, Entwurf eines BMF-Schreibens: Einzelfragen zur ertragsteuerrechtlichen Behandlung von virtuellen Währungen und von Token, 06/17/2021, https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Einkommensteuer/2021-06-17-est-kryptowaehrungen.pdf?__blob=publicationFile&v=3

[8] European Central Bank, “ECB announces members of Digital Euro Market Advisory Group”, 10/25/2021, https://www.ecb.europa.eu/press/pr/date/2021/html/ecb.pr211025~08af93ada7.en.html

[9] Bundesgesetzblatt Jahrgang 2021 Teil I Nr. 29, ausgegeben zu Bonn am 9. Juni 2021, “Gesetz zur Einführung von elektronischen Wertpapieren“, 06/03/2021, https://www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/Dokumente/Bgbl_elektronische_Wertpapiere.pdf;jsessionid=BBC4E2C94A1912B6B0046EDC9FD98BAF.2_cid334?__blob=publicationFile&v=2

[10] EUR-Lex, Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Markets in Crypto-assets, and amending Directive (EU) 2019/1937, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020PC0593

[11] Bundesgesetzblatt Jahrgang 2021 Teil I Nr. 69, ausgegeben zu Bonn am 29. September 2021, “Verordnung über verstärkte Sorgfaltspflichten bei dem Transfer von Kryptowerten (Kryptowertetransferverordnung — KryptoWTransferV)“, 09/24/2021, https://www.bundesfinanzministerium.de/Content/DE/Gesetzestexte/Gesetze_Gesetzesvorhaben/Abteilungen/Abteilung_VII/19_Legislaturperiode/2021-09-29-KryptoWTransferV/3-Verkuendete-Verordnung.pdf?__blob=publicationFile&v=4


If you want to criticize or endorse the article or parts of it, feel free to contact me via E-Mail or on any other social network. In my Linktr.ee you can find Podcast & YouTube interviews, as well as my own Podcast “Decrypted — Blockchain & Bitcoin mit Philipp”.

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Philipp J.A. Hartmannsgruber holds a master’s degree in Finance & Accounting. He is Head of Corporates & Digital Markets at CM-Equity AG and Head of Operations of the Blockchain Bundesverband (Bundesblock).
In 2019 he founded 
ShareHope, a non-profit NGO, right now in stealth-mode.

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