BTC is coming to the end of one of the biggest 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 ahead to a slew of improvements in 2021 – like the much-anticipated launch of Facebook’s bitcoin inspired cryptocurrency and potentially industry defining U.S. cryptocurrency regulations – Wall Street huge Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital advantage area more” next year.
“Over the older twelve years, [bitcoin & cryptocurrencies] have risen from virtually nothing to $560 billion in market capitalization,” John LaForge, head of natural asset program 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 early days of the 1850’s gold rush, which involved more speculating than investing.”
And also speculative interest from traditional investors, bitcoin and cryptocurrencies have noticed a surge in take-up from the likes of payments giants PayPal and Square the season – something that’s likely to have an impact in 2021.
“2021 really centers around continual developments in continuity between standard marketplaces as well as 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 lots of such use cases for crypto, and then we expect these to expand quickly in the coming season. Trading will nonetheless be reflective of this particular adoption curve; the taller the adoption, the more bullish the complete trading mix is going to be, which is a bullish bottom case for the key crypto assets.”
Bitcoin‘s volatility took “center stage” this year based on Crosby, with the bitcoin price 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 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 past twelve months amid a flurry of attention in decentralized finance (DeFi) – utilizing crypto expertise to recreate conventional monetary instruments including insurance as well as loans with a lot of DeFi projects built in addition to the ethereum network.
“From the trading perspective, most of the year’s focus has been on yield and structured products, we have seen a huge trend of futures goods and alternatives products come to market, and it’s very likely more will follow soon,” Crosby said.
“We have seen several of the’ edge case’ crypto-assets be mainstream as well, which should remain in the new year.”