BTC is actually coming to the end of one of the largest 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.
At this point, with the bitcoin as well as cryptocurrency group looking forward to a slew of innovations in 2021 – including the much-anticipated launch of Facebook’s bitcoin inspired cryptocurrency and likely industry-defining U.S. cryptocurrency laws – Wall Street giant Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital asset space more” following year.
“Over the past 12 years, [bitcoin and cryptocurrencies] have risen from virtually nothing to $560 billion in market capitalization,” John LaForge, head of natural 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’d in 2019” – naming cryptocurrency investing as “a bit like living in the early days of the 1850’s gold rush, which involved even more speculating than investing.”
And speculative interest from standard investors, bitcoin and cryptocurrencies have observed a surge in take up from the likes of payments giants PayPal and Square this year – something that is likely to have a direct impact in 2021.
“2021 actually centers around continual improvements in continuity between traditional markets and crypto markets,” Pierce Crosby, general manager at financial data business TradingView, said via email.
“A perfect example would be Square’s SQ +4.9 % bitcoin offering or perhaps PayPal’s PYPL +2.2 % payment via crypto. There are many such use cases for crypto, and then we expect these to grow rapidly in the coming season. Trading will nevertheless be reflective of this adoption curve; the higher the adoption, the more bullish the overall trading blend is going to be, which is a bullish base case for the key crypto assets.”
Bitcoin‘s volatility took “center stage” this season based on Crosby, with the bitcoin priced falling to lows of around $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 value following bitcoin, has soared by 300 % during the last twelve weeks amid a flurry of interest in decentralized finance (DeFi) – utilizing crypto know-how to recreate traditional monetary instruments such as loans as well as insurance with a lot of DeFi tasks built along with the ethereum network.
“From the trading perspective, nearly all almost all of the year’s focus has been on yield and structured products, we have seen a big trend of futures products and alternatives products come to market, and it’s likely more will follow soon,” Crosby said.
“We have noticed several of the’ edge case’ crypto-assets become mainstream too, and this should remain in the brand new year.”