2020 would go down as the year in which the major Bitcoin narrative changed. The first and largest crypto asset could be said to be having a tremendous year so far. On December 1, Bitcoin set historic highs of $19,915 nearly after three years of waiting. Although Bitcoin is experiencing some pullbacks at the moment, having retreated to $18,368 at press time, analysts maintain its long term outlook is bullish.
Despite Bitcoin’s tremendous year, early Bitcoin investors and Winklevoss twins, Cameron and Tyler Winklevoss reaffirmed their previous predictions that Bitcoin’s price will eventually surpass their target price of $500,000 per Bitcoin, while predicting that the sector “is still just beginning.” in their words:
“Pay attention to Bitcoin and crypto and educate yourself, because this is the greatest money and technological revolution since the Internet itself. It’s not a fad, it’s here to stay — and it will transform money, the Internet and so much of the world around you. And it’s just starting.”
Already 2021 is shaping up to be a tremendous year for cryptocurrencies especially Bitcoin as it coincides with BTC post halving cycle. Bitcoin historically rallied 12-15 months after previous halving events.
BTC/USD Daily ChartBitcoin presently trades at $18,368, down by 4.22% on the day.
1) Bitcoin and Ethereum to Perform Exceptionally Well
Frank Holmes, CEO of U.S. Global Investors in an interview stated that he expects major crypto assets Bitcoin (BTC) and Ethereum (ETH) to perform exceptionally well alongside gold. He believes that these crypto-assets are enjoying higher adoption because of their underlying value drivers. The top exec noted that the number of Bitcoin active wallets has seen growth in the last three years noting that the asset adoption ensued from the belief of a continuation of a multi-year trend. He also believes Bitcoin’s rise was also influenced by the last halving event in May 2020.
Although Holmes noted Bitcoin will perform well alongside gold, this view is slightly different from the Winklevoss twins who indicated that their $500,000 prediction is based on the assumption that Bitcoin’s market cap will increase by 40x to surpass gold’s market cap in the future.
2) Defi Growth to Impact Ethereum
The second-largest cryptocurrency Ethereum continues to profit from the recent developments in decentralized finance as the DeFi ecosystem continues to garner investors’ attention. Data from Dune Analytics indicated that the number of unique Ethereum addresses participating in various DeFi protocols has surged from about 91,000 to over 1 million in a year. In terms of total value locked, the DeFi ecosystem is worth over $14.6 billion, with Ethereum as the building block. The market cap of DeFi coins is present $18.2 billion.
Notably, today, as Bitcoin price was correcting, and most of the crypto market in red, strong fundamental factors seemed to push select DeFi tokens and NFTs higher.
3) Facebook-Backed Cryptocurrency Diem and Related Crypto Wallet Novi Could Be Launched
David Marcus, the head of Facebook Financial, said that Facebook-backed cryptocurrency Diem and related crypto wallet Novi could be launched the next year 2021. He believes that Diem cryptocurrency will finally see the right of passage from Global regulators. This he regarded as “the benefit of the doubt” from regulators to greenlight its launch in 2021.
On Dec. 1, 2020, Libra Association rebranded to the Diem Association in a bid to wade off the mixed reception of its former project, Facebook Libra.
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