BTC is coming to the end of one of the biggest 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.
Right now, with the bitcoin as well as cryptocurrency community looking ahead 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 regulations – Wall Street giant Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital resource room more” next year.
“Over the previous twelve years, [bitcoin and cryptocurrencies] have risen from virtually 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 season – “that’s in addition to the ninety % gain it’d in 2019” – naming cryptocurrency investing as “a bit like living in the original days of the 1850’s gold rush, which involved even more speculating than investing.”
As well as speculative interest from standard investors, bitcoin and cryptocurrencies have observed a surge in take-up from the likes of payments giants PayPal and Square this year – one thing that’s likely to have a direct impact in 2021.
“2021 actually centers around continual improvements in continuity between regular markets as well as crypto markets,” Pierce Crosby, general manager at financial details business 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’s a lot of such use cases for crypto, so we expect these to grow quickly in the coming year. Trading will nevertheless be reflective of this adoption curve; the taller the adoption, the more bullish the entire trading mix is going to 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 price falling to lows of about $4,000 per bitcoin throughout the March coronavirus crash before sharply rebounding, but added it is “almost impossible to pass over the’ Summer of DeFi,’ which echoed the initial coin offering (ICO) boom back in 2017.”
Ethereum, the world’s second largest cryptocurrency by worth after bitcoin, has soared by 300 % over the past 12 months amid a flurry of attention in decentralized finance (DeFi) – using crypto expertise to recreate traditional financial instruments including insurance as well as loans with many DeFi projects built on top of the ethereum network.
“From the trading perspective, majority of the year’s focus has been on yield and structured products, we have seen a huge wave of futures products as well as options products come to market, and it’s very likely more will follow soon,” Crosby said.
“We have observed some of the’ edge case’ crypto-assets be mainstream as well, and this should continue in the new year.”