BTC is coming to the end of one of the biggest years in its short history.
The bitcoin price has surged through 2020, reclaiming its 2017 all time highs after finding support from Wall Street and some of the world’s biggest investors.
Now, with the bitcoin and cryptocurrency group looking forward to a slew of innovations in 2021 – like the much-anticipated launch of Facebook’s bitcoin-inspired cryptocurrency and potentially industry-defining U.S. cryptocurrency laws – Wall Street giant Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital resource room more” next year.
“Over the previous 12 years, [bitcoin & cryptocurrencies] have risen from literally nothing to $560 billion in market capitalization,” John LaForge, head of real asset strategy at Wells Fargo, wrote in an investment strategy report this week.
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LaForge pointed to bitcoin’s 170 % gain this year – “that’s in addition to the 90 % gain it had in 2019” – naming cryptocurrency investing as “a bit like living in the first days of the 1850’s gold rush, which involved even more speculating over investing.”
And speculative interest from traditional investors, bitcoin along with cryptocurrencies have seen a surge in take up from the likes of payments giants PayPal and Square the season – one thing that is likely to have an effect in 2021.
“2021 really centers around continual advancements in continuity between traditional marketplaces and crypto markets,” Pierce Crosby, general manager at financial data business TradingView, said via email.
“A best example would be Square’s SQ +4.9 % bitcoin offering or PayPal’s PYPL +2.2 % transaction via crypto. There are many such use cases for crypto, so we expect these to grow rapidly in the coming year. Trading will nonetheless be reflective of this particular adoption curve; the higher the adoption, the more bullish the complete trading mix is going to be, which is a bullish base case for the main crypto assets.”
Bitcoin‘s volatility took “center stage” this season according to Crosby, with the bitcoin priced falling to lows of about $4,000 per bitcoin during the March coronavirus crash before sharply rebounding, but added it’s “almost impossible to pass over the’ Summer of DeFi,’ which echoed the initial coin offering (ICO) boom back in 2017.”
Ethereum, the world’s second-largest cryptocurrency by worth following bitcoin, has soared by 300 % over the past twelve months amid a flurry of interest in decentralized finance (DeFi) – using crypto know-how to recreate traditional monetary instruments such as for instance insurance and loans with many DeFi projects built in addition to the ethereum network.
“From the trading viewpoint, nearly all almost all of the year’s focus has been on yield and structured items, we’ve noticed a massive wave of futures goods as well as options items come to market, and it is very likely more will follow soon,” Crosby said.
“We have seen some of the’ edge case’ crypto-assets become mainstream too, which should remain in the brand new year.”