BTC is coming to the end of one of the leading years in its brief 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.
Right now, with the bitcoin as well as cryptocurrency community looking forward to a slew of innovations in 2021 – including the much anticipated launch of Facebook’s bitcoin-inspired cryptocurrency and potentially industry-defining U.S. cryptocurrency laws – Wall Street huge Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital resource area more” following year.
“Over the previous twelve 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 season – “that’s in addition to the 90 % gain it’d in 2019” – naming cryptocurrency investing as “a bit like living in the early days of the 1850’s gold rush, which involved more speculating than investing.”
And speculative interest from traditional investors, bitcoin along with cryptocurrencies have noticed a surge in take up from the likes of payments giants PayPal and Square this year – one thing that is expected to have a direct impact in 2021.
“2021 definitely centers around continual developments in continuity between traditional marketplaces and crypto markets,” Pierce Crosby, general manager at financial data company TradingView, said via email.
“A perfect example would be Square’s SQ +4.9 % bitcoin offering or perhaps PayPal’s PYPL +2.2 % transaction by crypto. There are lots of such use cases for crypto, and then we expect these to grow quickly in the coming season. Trading will nonetheless be reflective of this adoption curve; the higher the adoption, the more bullish the overall trading mix will be, that is a bullish bottom case for the key crypto assets.”
Bitcoin‘s volatility took “center stage” this year based on Crosby, with the bitcoin priced falling to lows of about $4,000 per bitcoin throughout 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 after bitcoin, has soared by 300 % over the past twelve weeks amid a flurry of interest in decentralized finance (DeFi) – using crypto expertise to recreate conventional financial instruments such as insurance as well as loans with numerous DeFi tasks built along with the ethereum network.
“From the trading perspective, majority of the year’s focus has been on yield and structured products, we have observed a huge wave of futures goods and options items come to market, and it’s likely more will follow soon,” Crosby said.
“We have noticed several of the’ edge case’ crypto assets be mainstream too, which should continue in the brand new year.”