BTC is coming to the conclusion 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 several of the world’s biggest investors.
Now, with the bitcoin as well as cryptocurrency community looking forward to a slew of innovations in 2021 – like the much anticipated launch of Facebook’s bitcoin inspired cryptocurrency and likely industry defining U.S. cryptocurrency laws – Wall Street giant Wells Fargo WFC +1.5 % has said it expects to be “discussing the digital advantage room more” following year.
“Over the older 12 years, [bitcoin & cryptocurrencies] have risen from literally nothing to $560 billion in market capitalization,” John LaForge, head of real 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 season – “that’s on top of the 90 % gain it had in 2019” – naming cryptocurrency investing as “a bit like living in the original days of the 1850’s gold rush, which involved more speculating than investing.”
As well as speculative interest from traditional investors, bitcoin along with cryptocurrencies have observed a surge in take up from the likes of payments giants PayPal and Square the season – one thing that’s expected to have an impact in 2021.
“2021 definitely centers around continual improvements in continuity between standard marketplaces and crypto markets,” Pierce Crosby, general manager at financial data company TradingView, said via email.
“A perfect example would be Square’s SQ +4.9 % bitcoin offering or maybe PayPal’s PYPL +2.2 % transaction via crypto. There are plenty 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 blend is going to be, which is a bullish base case for the major crypto assets.”
Bitcoin‘s volatility took “center stage” this season according to Crosby, with the bitcoin priced 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 value after bitcoin, has soared by 300 % during the last 12 weeks amid a flurry of interest in decentralized finance (DeFi) – using crypto technology to recreate traditional financial instruments for example loans and insurance with many 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 products, we have observed a major trend of futures goods and alternatives products come to market, and it is likely more will follow soon,” Crosby said.
“We have noticed several of the’ edge case’ crypto-assets become mainstream as well, which should remain in the new year.”