BTC is coming to the conclusion of one of the leading 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.
Now, with the bitcoin and cryptocurrency society looking forward to a slew of innovations in 2021 – including the much-anticipated launch of Facebook’s bitcoin inspired cryptocurrency and potentially industry defining U.S. cryptocurrency laws – Wall Street huge Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital asset area more” next year.
“Over the past twelve years, [bitcoin & 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 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 more speculating over investing.”
And speculative interest from regular investors, bitcoin and cryptocurrencies have seen a surge in take up from the likes of payments giants PayPal and Square the year – something that is likely to have a direct impact in 2021.
“2021 really centers around continual advancements in continuity between regular markets and crypto markets,” Pierce Crosby, general manager at financial data business TradingView, said via email.
“A best example would be Square’s SQ +4.9 % bitcoin offering or PayPal’s PYPL +2.2 % payment by crypto. There’s a lot of such use cases for crypto, so we expect these to expand rapidly in the coming year. Trading will nonetheless be reflective of this adoption curve; the higher the adoption, the more bullish the overall trading mix is going to be, that is a bullish starting case for the key crypto assets.”
Bitcoin‘s volatility took “center stage” this year according to 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 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 past twelve weeks amid a flurry of attention in decentralized finance (DeFi) – utilizing crypto expertise to recreate traditional monetary instruments such as for instance loans as well as insurance with numerous DeFi tasks built along with the ethereum network.
“From the trading viewpoint, virtually all of the year’s focus has been on yield and structured items, we’ve observed a major wave of futures products and alternatives items come to market, and it is likely more will follow soon,” Crosby said.
“We have noticed some of the’ edge case’ crypto assets be mainstream also, and this should remain in the new year.”