Well, it’s another somewhat ugly day for bitcoin. Just yesterday, the world’s number one digital currency by market cap was trading in the low $18,000 range, which was a big hit from the $19,000+ it had been experiencing in the weeks before. Now, the asset has lost more than $1,000 off that price, and at first glance, it looks like 2020 may not be ending on the high note that everyone initially predicted.
Bitcoin Has Dropped, But It Hasn’t Fallen
And yet many analysts still believe that this is just the beginning for the currency, and that the asset will have its biggest year in 2021. Given how many crypto developments are set to debut during this time, many industry experts are convinced that the currency could potentially expand to levels that traders have never anticipated.
John LaForge – head of real asset strategy at Wells Fargo – explained in a recent report that he thinks the bank is edging further towards crypto every day, and he’s convinced the financial institution may soon have a department devoted to blockchain and digital assets. He says:
Over the past 12 years, [bitcoin and cryptocurrencies] have risen from literally nothing to $560 billion in market capitalization. Fads don’t typically last 12 years. there are good reasons for this. Reasons that every investor should hear. As we roll into 2021, we’ll be discussing the digital asset space more – it’s upside and downside.
Men such as Pierce Crosby, general manager at financial data firm Trading View, comments that two of the biggest things working for crypto this year have been PayPal’s agreement to allow its customers to purchase digital assets through its platform and institutional players such as Square taking a stronger stance in favor of bitcoin’s utilization. He comments in a recent interview:
2021 really centers around continual improvements in continuity between traditional markets and crypto markets. A perfect example would be Square’s bitcoin offering or PayPal’s payment via crypto. There are many such use cases for crypto, and we expect these to expand rapidly in the coming year. Trading will still be reflective of this adoption curve. The higher the adoption, the more bullish the overall trading mix will be, which is a bullish base case for the major crypto assets.
Big Developments Are Coming
Crosby says that one of the big markers for bitcoin has been its 2020 volatility. In mid-March, the currency dropped as low as $4,000, though at the time of writing, the asset’s price has expanded by nearly $15,000. He says:
From the trading perspective, most of the year’s focus has been on yield and structured products. We’ve seen a huge wave of futures products and options products come to market and It’s likely more will follow soon. We have seen some of the ‘edge case’ crypto assets become mainstream as well, and this should continue in the new year.