BTC is actually coming to the end of one of the largest years in the short history of its.
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 as well as cryptocurrency community looking ahead to a slew of developments in 2021 – like the much-anticipated launch of Facebook’s bitcoin-inspired cryptocurrency and likely industry-defining U.S. cryptocurrency laws – Wall Street huge Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital asset room more” next year.
“Over the past 12 years, [bitcoin and cryptocurrencies] have risen from virtually 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 on top of the 90 % gain it had in 2019” – naming cryptocurrency investing as “a bit like living in the early days of the 1850’s gold rush, which involved more speculating over investing.”
And also speculative interest from standard investors, bitcoin along with cryptocurrencies have seen a surge in take up from the likes of payments giants PayPal and Square this year – one thing that’s anticipated to have an impact in 2021.
“2021 really centers around continual advancements in continuity between traditional markets and crypto markets,” Pierce Crosby, general manager at financial data company TradingView, said via email.
“A best example would be Square’s SQ +4.9 % bitcoin offering or perhaps PayPal’s PYPL +2.2 % payment by crypto. There are lots of such use cases for crypto, so we expect these to expand quickly in the coming season. Trading will nevertheless be reflective of this particular adoption curve; the taller the adoption, the more bullish the entire trading blend will be, which is a bullish base case for the key crypto assets.”
Bitcoin‘s volatility took “center stage” this season in accordance with 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 is “almost impossible to pass around the’ Summer of DeFi,’ which echoed the primary coin offering (ICO) boom back in 2017.”
Ethereum, the world’s second largest cryptocurrency by value after bitcoin, has soared by 300 % over the last 12 months amid a flurry of attention in decentralized finance (DeFi) – utilizing crypto technology to recreate traditional financial instruments such as loans and insurance with a lot of DeFi projects built on top of the ethereum network.
“From the trading perspective, most of the year’s focus has been on yield and structured products, we have observed a tremendous trend of futures products and choices items come to market, and it’s very likely more will follow soon,” Crosby said.
“We have observed several of the’ edge case’ crypto-assets become mainstream also, which should continue in the new year.”