It has been quite the year for crypto enthusiasts as 2020 saw major currencies like Bitcoin, Ethereum, and Chainlink all emerge as viable and mainstream investments. The catalyst? While the exact focal point is difficult to determine, 2020 provided the perfect storm for investing. First, the COVID-19 pandemic kept many of us quarantined inside of our homes with little else to spend our money on. Second, a series of stimulus checks in the United States caused an incredible amount of liquidity to enter the markets at the same time. Third, as the stock market experienced increased volatility, investors sought out inflationary hedges such as precious metals and of course, cryptocurrencies. Finally, the ease of access to investing in cryptocurrencies reached the mainstream en masse in 2020, as a shift to mobile platform investing on apps like Robinhood, opened the door for retail investors everywhere.
So can we expect the same amount of growth for Bitcoin and Ethereum in 2021 as in 2020? While it is difficult to imagine Bitcoin topping its growth from 2020 where it gained over 300% from January 1st to December 31st, including briefly touching an all-time high price of $41,930 USD. But analysts are increasingly bullish on Bitcoin and it is easy to see why. Institutional buy-in is at an all-time high as major U.S. banks including JPMorgan and Goldman Sachs, as well as global giants like the DBS bank of Singapore and Japanese bank SBI Holdings, have all softened their stance and are actively getting involved in Bitcoin. Combined with major fintech players like PayPal and Square allowing their vast network of users to buy, sell, and hold major cryptocurrencies within their platforms, Bitcoin is becoming a regular part of every investor’s portfolio. There is a massive bullish community of analysts that are predicting Bitcoin may rise up to the price range of $100,000 by the end of the year, which illustrates a near 200% upside from today’s price levels. Add in celebrity endorsement from figures like Elon Musk and even professional athletes requesting to be paid part of their contracts in Bitcoin, and it is easy to see why Bitcoin is here to stay.
Ethereum is often overlooked by casual crypto investors but is the number two ranked cryptocurrency behind Bitcoin in terms of price and market cap. The recent strength of Ethereum is showing as of late as it has closed above $1000 in value for an entire month straight, something it has never before accomplished. There is reason to believe that Ethereum will continue to rise in 2021 given the current frenzied climate surrounding cryptocurrencies as well as investing in general. Further to this, the long-awaited Ethereum 2.0 launched back in December and is rolling out in several phases. This newish version of Ethereum brings a massive upgrade to the coin’s scalability, as well as utilizing shard chains to exponentially increase the number of transactions that can take place per second. Increased transactions and scalability could bring Ethereum to all new heights in 2021, especially with the rising acceptance of cryptocurrencies by mainstream financial institutions.