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The new year has arrived. All the craziness and sloppiness of 2020 can potentially be put behind us as we look towards the future. Will 2021 be a kind year? Will it be kind to bitcoin?
Will Bitcoin Have a Solid Run in 2021?
The one thing we can say about the last 12 months is that they have been rather positive for cryptocurrency. The rest of us have been left out in the rain, no doubt, but crypto traders and investors are likely looking at their stashes at the time of writing and felling pretty darn good about what they’ve done. The world’s most powerful and largest digital currency by market cap – bitcoin – ultimately began the year at $7,000 and added close to $20,000 to its price by the end of the year.
Sounds solid, doesn’t it? Many of us can’t help but wonder if perhaps a repetition of the 2017-2018 patterns may occur. The asset rose to its all-time high during those first 12 months and came crashing down the following year. Things then took a significant period to recover.
But with so many analysts claiming that this run is different thanks to institutional support, we likely feel a little stronger this time around and a little more confident in how things will go down in the new year. Firms like MicroStrategy, Stone Ridge and Square have invested hundreds of millions of dollars in crypto. Platforms like PayPal are now allowing individuals to buy cryptocurrencies and use them to purchase goods and services.
Thus, bitcoin and its altcoin cousins are being viewed in multiple capacities. Institutional players see them as stores of value, while digital payment platforms like PayPal see them as items to be used in their original capacity. It was always believed – since the bitcoin whitepaper was first released in 2008 – that bitcoin and its digital friends would rise to the occasion and be used as payment methods.
The goal was that these assets would potentially replace fiat currencies in the future. However, this has been far off the mark given how volatile these assets tend to be. Bitcoin has experienced some of the biggest spikes and some of the lowest drops in the history of financial assets, and as a result, many retailers, stores and places of business refused to permit bitcoin transactions due to fear that they could potentially lose funds overnight.
Maybe We Can Relax a Little
But with PayPal getting things started in this way, perhaps these currencies can someday be viewed in the same light as credit cards, checks and good old-fashioned cash, and with all these new developments now coming to light, perhaps 2021 is the year in which this will happen.
Either way, bitcoin continues to surrender to the bulls and enjoy additional growth that will likely last at least through the early months of the year, so perhaps traders should sit back and enjoy the ride.