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.
Right now, with the bitcoin as well as cryptocurrency group looking forward to a slew of developments in 2021 – including 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 space more” following year.
“Over the past twelve years, [bitcoin and cryptocurrencies] have risen from literally 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 along with the ninety % 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 than investing.”
As well as speculative interest from standard investors, bitcoin along with cryptocurrencies have observed a surge in take up from the likes of payments giants PayPal and Square the season – something that’s expected to have a direct effect in 2021.
“2021 actually 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 perhaps PayPal’s PYPL +2.2 % payment via crypto. There are plenty of such use cases for crypto, so we expect these to grow quickly in the coming season. Trading will still be reflective of this adoption curve; the taller the adoption, the more bullish the complete trading mix will be, which is a bullish base case for the main crypto assets.”
Bitcoin‘s volatility took “center stage” this year 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 original 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 interest in decentralized finance (DeFi) – using crypto technology to recreate traditional monetary instruments such as insurance and loans with a lot of DeFi tasks built on top of the ethereum network.
“From the trading viewpoint, majority of the year’s focus has been on yield and structured items, we have seen a huge trend of futures products and choices products come to market, and it’s likely more will follow soon,” Crosby said.
“We have seen some of the’ edge case’ crypto assets be mainstream also, and this should continue in the brand new year.”