BTC is actually coming to the conclusion of one of the biggest 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 several of the world’s biggest investors.
Now, with the bitcoin and cryptocurrency society looking ahead to a slew of developments in 2021 – including the much anticipated launch of Facebook’s bitcoin-inspired cryptocurrency and likely industry-defining U.S. cryptocurrency regulations – 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 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 season – “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 than 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 season – one thing that is anticipated to have a direct effect in 2021.
“2021 definitely centers around continual advancements in continuity between regular marketplaces 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 % transaction via crypto. There are many such use cases for crypto, so we expect these to grow quickly in the coming year. Trading will still be reflective of this particular adoption curve; the taller the adoption, the more bullish the overall trading mix will be, that is a bullish starting case for the main 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 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 past 12 weeks amid a flurry of attention in decentralized finance (DeFi) – using crypto know-how to recreate conventional financial instruments including loans and insurance with a lot of DeFi tasks built along with the ethereum network.
“From the trading viewpoint, majority of the year’s focus has been on yield and structured products, we have noticed a tremendous trend of futures goods and alternatives items come to market, and it’s likely more will follow soon,” Crosby said.
“We have seen several of the’ edge case’ crypto assets be mainstream too, which should continue in the new year.”