BTC is coming to the end of one of the leading 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.
Now, with the bitcoin as well as cryptocurrency community looking ahead to a slew of improvements in 2021 – like 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 area more” following year.
“Over the previous twelve 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 year – “that’s in addition to the 90 % 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 than investing.”
As well as speculative interest from regular investors, bitcoin and cryptocurrencies have noticed a surge in take-up from the likes of payments giants PayPal and Square this year – something that is anticipated to have a direct impact in 2021.
“2021 really centers around continual advancements in continuity between standard marketplaces as well as crypto markets,” Pierce Crosby, general manager at financial data business TradingView, said via email.
“A perfect example would be Square’s SQ +4.9 % bitcoin offering or PayPal’s PYPL +2.2 % transaction by crypto. There are many such use cases for crypto, and we expect these to grow rapidly in the coming season. Trading will still be reflective of this particular adoption curve; the taller the adoption, the more bullish the complete trading mix will be, that is a bullish bottom case for the major crypto assets.”
Bitcoin‘s volatility took “center stage” this year based on 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 around the’ Summer of DeFi,’ which echoed the initial coin offering (ICO) boom back in 2017.”
Ethereum, the world’s second largest cryptocurrency by value following bitcoin, has soared by 300 % over the last 12 weeks amid a flurry of interest in decentralized finance (DeFi) – utilizing crypto technology to recreate conventional monetary instruments such as loans as well as insurance with many DeFi projects built along with the ethereum network.
“From the trading viewpoint, most of the year’s focus has been on yield and structured products, we have observed a major trend of futures products as well as options items come to market, and it’s likely more will follow soon,” Crosby said.
“We have observed several of the’ edge case’ crypto-assets be mainstream too, and this should continue in the new year.”