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 and cryptocurrency community 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 regulations – Wall Street giant Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital asset room more” next year.
“Over the previous 12 years, [bitcoin and 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 along with the 90 % gain it had in 2019” – naming cryptocurrency investing as “a bit like living in the original days of the 1850’s gold rush, which involved more speculating over investing.”
As well as speculative interest from traditional investors, bitcoin and cryptocurrencies have seen a surge in take up from the likes of payments giants PayPal and Square this season – one thing that is anticipated to have a direct effect in 2021.
“2021 really centers around continual improvements in continuity between regular 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 maybe PayPal’s PYPL +2.2 % payment by crypto. There’s a lot of such use cases for crypto, so we expect these to expand quickly in the coming year. Trading will nonetheless be reflective of this adoption curve; the taller the adoption, the more bullish the overall trading blend will be, which is a bullish bottom case for the key crypto assets.”
Bitcoin‘s volatility took “center stage” this season based on Crosby, with the bitcoin price 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 initial coin offering (ICO) boom back in 2017.”
Ethereum, the world’s second largest cryptocurrency by value after bitcoin, has soared by 300 % during the last twelve weeks amid a flurry of attention in decentralized finance (DeFi) – utilizing crypto technology to recreate traditional monetary instruments such as insurance as well as loans with many DeFi tasks built along with 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 observed a massive trend of futures products and choices items come to market, and it’s very likely more will follow soon,” Crosby said.
“We have seen some of the’ edge case’ crypto-assets be mainstream too, which should remain in the new year.”