It’s official, this was Binance Coin’s year. There are no two ways about it, BNB crushed it throughout 2021 and cemented itself as the third more popular coin in the world by market capitalization. Not a small feat, considering the phenomenal year that altcoins had. Several coins had their moment in the sun, capturing capital, headlines, and attention. No one got near Binance Coin, though.
Binance Coin's stellar performance | Source: The Weekly Update
According toArcane Research’s The Weekly Update:
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“Bitcoin may have beaten the stock market in 2021, but it has been left in the dust by other cryptocurrencies. Binance Coin (BNB) is the best performer of the three biggest cryptocurrencies by market cap, with a 1344% gain. The Binance Smart Chain ecosystem has seen massive growth in 2021, taking some market share from Ethereum.”
That’s why they dubbed Binance Coin as “the winner of 2021,” and their point is well taken. However, there’s more to the story. Binance as a company was in hot water for a while there. And their own validators blasted the Binance Smart Chain, saying things like, “There doesn’t appear to be any reasonable testing process in place. Every update appears to make things worse.”
Let’s explore the Binance Coin ecosystem’s tumultuous year.
Big Projects Decided To Operate On The Binance Smart Chain
There’s no denying it. As The Weekly Update says, “Ethereum has lost its indisputable position as the “one and only” smart contract platform.” And Binance has a lot to do with that. A controversial project from the start, the Binance Smart Chain has been dubbed a centralized Ethereum clone. And they have a point. However, even though the Binance team did fork Ethereum’s code, they were always upfront with the direction of the project.
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In BSC’s documentation, the team shamelessly claims that the “Binance Smart Chain uses a consensus model called Proof of Staked Authority (PoSA). (…) This consensus model can support a short block time and low fees, and it only requires 21 validators to run.” Contrast that with the 11.000 nodes that reportedly support the Ethereum ecosystem.
Also,their plan workedand projects flocked to it:
“Binance Smart Chain was developed explicitly to solve Ethereum’s rising gas fees and offers faster, scalable, and cheaper transactions. In the past, several alternative blockchains have tried to become ‘Ethereum Killers’ but couldn’t succeed in capturing new project’s interest. However, Binance Smart Chain is hosting numerous blockchain, Defi, and crypto projects.”
Problems And Connection To The Binance Coin
However, as in Ethereum’s case, success came with scalability problems. A set ofvalidators took to GitHubto raise concerns about the state of the network and how running a complete node’s cost has increased tremendously. “There is no code review, patches are simply committed, in most cases even without a proper description of what they do or what problem they try to solve,” the original poster said.
“I’ve rarely seen something handled so unprofessionally,” the OP accused. “I have many full nodes running there and now all of them are unable to sync. Each of these servers costs me $800 per month (previously only $200), then you told me that I need faster bandwidth and disk which means the cost will keep rising,” a commenter claimed.
What does this have to do with the Binance Coin? Everything. As the native currency of the Binance ecosystem, BNB’s success is tied to the success of the whole network. Binance is still doing amazing, but, can Binance Coin holders count on that to be the case in 2022?
BNB price chart for 12/29/2021 on Binance US | Source: BNB/USD on TradingView.com
Make No Mistake, Binance Coin Won 2021
It was an action-packed year, but Binance Coin rose to the test. Besides the validators uprising, the Binance team took care of theseflash loan hacksand kept BNB’s price rising throughout the year. When CZ himself called forother entrepreneurs to create their own coins, NewsBTCwas the voice of reason:
“Binance is not only the biggest exchange in the world; it also has the most activities, features, things to do. BNB powers all of that. How many coins support that huge of an ecosystem? How many coins have that many use cases? And yes, BNB provides its user with superpowers while in the Binance ecosystem and helps them save money. How many other coins can do something similar?”
Let’s not kid ourselves, the Binance Coin AKA BNB is a unicorn. A one-of-a-kind project that did many things right and rewarded the early believers with a phenomenal year. A 1344% increase in price is not something we see every day. Congratulations to Binance Coin for owning 2021.
Featured Image: Foundry on Pixabay | Charts by TradingView & The Weekly Update
The world’s second-largest crypto asset has gained ground on Bitcoin in terms of trading volume growth during the first half of this year according to a new report.
Ethereum’s trading volume grew faster than Bitcoin’s in the first half of this year according to a new report from leading U.S. crypto exchange Coinbase.
The Coinbase Institutional H1 2021 in Review report, released on July 26, acknowledged that the first half of this year has been one of the most active periods on record for crypto, with several new all-time highs in prices, user adoption, and trading activity.
Taking data from twenty exchanges across the globe, the report revealed that the trading volume for Bitcoin reached $2.1 trillion for the period, up 489% from $356 billion over the first half of last year.
Ethereum’s total trading volume reached $1.4 trillion, but its growth was much faster, up 1,461% from $92 billion in the first half of 2020. Coinbase remarked that it has been the first sustained period of time ever that Ethereum’s trading pace exceeded Bitcoin’s.
The research also measured total crypto market capitalization, which began the year at $769 billion, peaked at $2.4 trillion in May, and ended the period at $1.4 trillion, registering a net gain of 86% year to date.
Related:Ethereum has strong fundamentals, so why are pro traders bearish on ETH?
It noted that the bulk of BTC’s gains came during Q4 2020 and Q1 2021, before the crypto asset’s price declined in Q2 2021. It is currently trading down 38.8% from its April 13 all-time high of $65,899.
Ethereum, on the other hand, saw the majority of its gains in Q2 2021 when it doubled in price to reach an all-time high of $4,357 on May 12, however it has retreated an even deeper 47.4% to current levels.
The second most valuable crypto asset appreciated 895% over the 12-month period and 210% over the 6-month period ending June 30. Coinbase attributed a number of factors to this including increased usage in DeFi, investor optimism in the transition to proof-of-stake, and the rise of layer-two scaling solutions for the network.
In January, Cointelegraph predicted that Ethereum will become the main asset for investors in 2021. Both BTC and ETH have rallied over the past week gaining 32.4% and 27.7% respectively according to CoinGecko.
The bitcoin price has surged about 300 percent over the last 12 months thanks to mainstream adoption and institutional interest. It has rallied massively to surpassing all-time highs of $41,000. At the time of this writing, the price is hovering around $35,000 and it will be interesting to watch traders’ reactions and price behavior for the rest of 2021.
The Bull Run Will Likely Continue
Bitcoin’s bull cycle will likely continue, especially in the second half of 2021. One of the causes of price increase will be widespread adoption. Currently, relatively few people accept and use Bitcoin in everyday life. However, we could see mainstream acceptance in the coming months. For instance, PayPal has allowed its users to buy and sell bitcoin using PayPal accounts. Also, Square invested $50 million in bitcoin. Ongoing mainstream adoption like this could boost bitcoin’s price significantly.
The liquidity in bitcoin has been a telltale sign that more institutional bodies are at play. Similarly, throughout 2021 the institutional interest is expected to drive the prices of bitcoin and other cryptocurrencies.
In another sign of the mainstream growth of cryptocurrencies expected in 2021, major cryptocurrency exchange Coinbase is expected to become a publicly-listed company this year. The exchange’s institutional assets increased from $6 billion to a whopping $20 billion between April and November of 2020.
Caused by the U.S. dollar’s cyclical bear market and global liquidity, bitcoin will benefit significantly from people hedging against inflation. Many retail traders will also jump in due to the fear of missing out (FOMO), pushing the price further. Traders who will not want to invest directly in bitcoin will trade contracts for difference (CFDs) on bitcoin via forex brokers and trading platforms.
Institutional Interest
As mentioned above, in October 2020, PayPal announced that it would support buying and selling cryptocurrency. Also, other Institutions and Wall Street giants have shown interest in cryptocurrency. For instance, JPMorgan Chase & Co. and Citibank are predicting a bullish bitcoin market. According to a leaked report from Citibank, the analysts refer to bitcoin as 21st century gold predicting that it could hit $318,000 by the end of 2021. Likewise, Will Woo, a former partner at Adaptive Capital, has referred to $200,000 as a conservative price.
A note to institutional clients from Tom Fitzpatrick, the global head of CITIFX, leaked on Twitter. The note showed a chart of three bitcoin bulls in the last decade. He suggested that the bitcoin rally could hit a peak of $318,000 in December 2021. However, other analysts such as BTIG and Bloomberg have been more conservative, predicting the price will reach $50,000.
Fiat Fiscal And Monetary Policies
Fiscal policy and monetary policies aiming to devalue currency will work in favor of the bitcoin price. Much of the demand will come from investors who fear that the money printing will devalue conventional money. With fiat money growing out of control, bitcoin is seen as a fixed asset, just like gold.
Besides a weak monetary policy, the dollar could also be affected massively by the COVID-19 vaccine rollout. For these reasons, the demand for bitcoin might increase significantly.
Pullback Could Happen
While cryptocurrency proponents are exuberant, there is a possibility that bitcoin prices won’t rise beyond the all-time high set in 2020. In fact, the price may fall back and remain below this mark for some time, as was the case during the 2017 rally. Some believe that the only time bitcoin is likely to reach another significant high is in 2024, following the next mining subsidy halving.
Bitcoin’s popularity as digital gold is spreading fast. However, unlike gold, bitcoin is experiencing its first global crisis, caused by COVID-19, as it was born in 2009 following the 2008 financial recession. The 2020 bear run in the market saw investors sell equities for cash. Even gold, which is considered by many to be a safer investment than bitcoin, dipped in March. Bitcoin crashed hard in mid-March too, but the bitcoin case was different. The cryptocurrency bounced from the bottom a month later in a bull run that continued until the end of the year.
Regulators
Regulators have been scrutinizing digital currencies for years. Some people, albeit only a few, are using cryptocurrencies to engage in illegal trades and with the surging value of cryptocurrencies, governments around the world will be looking closely at the market. For instance, a lawsuit by the U.S. Securities and Exchange Commission (SEC) against altcoin project Ripple saw XRP prices fall by almost half.
See Also
Regulatory agencies could suddenly erect a hurdle to tame unscrupulous activities surrounding bitcoin, but this regulation couldn’t affect bitcoin’s bullish run significantly.
Competition From Central Banks And Big Tech
Transactions involving different fiat currencies can take days and involve heavy fees and a global digital currency could significantly streamline this process in 2021. While bitcoin adoption is growing, the cryptocurrency could face competition to solve this problem from big tech. A good example is Facebook’s digital currency and, while Facebook diem is quite different from Bitcoin, it may draw some attention away from bitcoin in 2021.
Likewise, central banks are also competing against bitcoin. As reported by Banks for International Settlements, 80 percent of central banks are on the verge of developing some form of digital currency. For instance, China is working toward the adoption of a digital yuan. In many critical ways, these central bank digital currencies will be vastly different than bitcoin.
Conclusion
In general, the adaptation of bitcoin in commerce is a perfect cause for price increases in 2021. While bitcoin’s price and adoption is expected to proliferate, we can’t rule out the opposite and volatility is certainly possible.
This is a guest post by Michael. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
2021 is shaping up to be a momentous year for Bitcoin as the price hurtles toward $40,000 — more than double its 2017 all-time high. As HODLers rejoice and naysayers are left in disbelief, it’s important to note that a lot has changed in the world since 2017, making this bull run infinitely disparate from the previous one.
Global pandemic and political mayhem aside, many other things have changed in the last few years, even in the microcosm of Bitcoin. In short:
Bitcoin, not shitcoins
Accumulation, not trading
Institutions, not consumers
Bitcoin, Not Shitcoins
In 2017, bitcoin was like a gateway drug for all of crypto. People weren’t necessarily looking at bitcoin as a long-term investment. They were using bitcoin to trade altcoins and get into ICOs — gambling away fortunes in hopes of getting filthy rich.
2017 was the first time that the mainstream public had any sort of exposure to crypto assets and when it happened, it was like the Wild West. Regulation was near zero and anybody, anywhere who had some money could spin up a token and list it on an exchange. Consumer protections were nonexistent and suddenly, everybody was an expert on evaluating early-stage, blockchain-based “investments.”
This led to the ICO craze where everyone from your Uber driver to seasoned Silicon Valley investors became blinded by the hype and got burned on fundamentally unsound investments. To my chagrin, this is likely how the majority of nocoiners today remember bitcoin and crypto. This New York Times article is the epitome of 2017 crypto-mania:
A lot of the hype and money to be made in 2017 was outside of bitcoin, so capital flowed from fiat into bitcoin and then into pretty much every other cryptocurrency. From there, it essentially went to shit, as the creators of the tokens/early investors took everyone’s money by dumping their bags. (Reminder: Satoshi has never sold any bitcoin.) In fact, within the first half of 2018, over 86 percent of all ICOs that listed in 2017 had falled below their initial listing price, and their founders are likely either in jail or enjoying their ill-gotten wealth on a beach in some remote island paradise.
This time, things are different. Money flowing from fiat to bitcoin is staying there. Bitcoin market dominance was at an all-time low during peak crypto mania in 2017 and now, it’s almost double what it was then.
Altcoin volumes are relatively low, especially among retail investors. The people who are dabbling with altcoins, specifically ether, are the ones who are experienced, not newcomers.
Most trading activity in crypto happens in DeFi on the Ethereum blockchain (whale-dominated decentralized exchanges which take technical experience and understanding to use), and in derivatives markets (CME/Bakkt futures and options for institutional players, and offshore derivatives exchanges such as BitMEX).
Bitcoin is no longer being used for trading or as a way to move capital into other crypto assets. Instead, it’s being accumulated for the long term.
Accumulation, Not Trading
In the last two years, over $30 billion dollars worth of bitcoin has been accumulated for the long term. A total of 2.814 million bitcoin are in accumulation addresses right now — that’s 15.16 percent of all bitcoin in circulation.
62.31 percent of all bitcoin in circulation hasn’t been moved in over a year, and less than 15 percent of it is actively traded on exchanges. This much bitcoin hasn’t been HODLed since pre-2017. As you can see, this number plummeted during the bull run when trading altcoins/ICO investing was popular:
People aren’t trading bitcoin, they’re accumulating more and more of it over time and holding it long term (aka, “stacking sats“). This is evident not only through the raw on-chain data and exchange flows, but also through consumer behavior.
People are dollar-cost averaging (DCAing), buying the dip and getting bitcoin-back rewards. Consumer Bitcoin products see this demand, and are building for it:
Cash App, Rive and Swan DCA: Buy x bitcoin every y time interval
Ryze Accumulate: Automatically buy the dip and accumulate more bitcoin than by DCAing
Lolli and Fold: Get bitcoin back on everyday purchases
Why is this shift happening from trading Bitcoin to accumulating it over time?
There are two equally important explanations for this shift:
The COVID-Induced Macroeconomic Environment
Central banks are printing unlimited amounts of money and interest rates are near or below zero. This will inevitably lead to inflation, so capital is flowing into inflationary hedges such as bitcoin, gold and real estate. Bonds are worthless. Fiat currencies are losing value day by the day. And we’ve already seen two currency collapses in the past year (Turkey’s and Lebanon’s). People are hedging the existing financial system as well as fiat inflation by accumulating bitcoin.
Further reading:
2. Anthropological And Monetary Theory: Evolution Of Bitcoin
All organically-adopted money follows a path of evolution: collectible, store of value, medium of exchange and, finally, unit of account/reserve asset.
Like gold, seashells and beads, bitcoin started as a collectible. Its scarcity, unforgeable costliness of creation and the price somebody else was willing to pay for it are the things that gave it value to the average individual.
Thus, it was heavily traded from 2016 to 2018 as a speculative collectible/commodity, following the same behavioral economics patterns as baseball cards, oil and pork belly futures.
Now, bitcoin is evolving into a store of value — something that will retain its purchasing power, preserving and growing wealth over time. Precious metals, interest-bearing assets, productive land, etc. have been traditional stores of value.
Bitcoin is joining these ranks as consumers, public companies and, most importantly, institutional investors are all buying bitcoin as a store of value in an inflationary environment.
Further Reading:
Institutions, Not Retail
2017’s bull run was led by retail investors — everyday folks trying to get into bitcoin and make money. Smart investors mainly thought it was a scam, with the exception of some notable die-hards like Chamath Palihapitiya and the Winklevoss Twins.
See Also
This time, everyday consumers aren’t paying as much attention. Part of that is because every single person is worn out from the dumpster fire that was 2020, and people just don’t care about bitcoin right now. Part of it is the focus from media coverage on pressing issues like COVID-19 vaccines, impeachment 2.0, economic stimulus and more.
With consumers largely preoccupied, institutional investors are leading this 10x rally from $4,000 in March 2020 to new all-time highs past $40,000.
A Fidelity report from June, shortly after unlimited fiscal stimulus was announced, found that more than 35 percent of institutional investors see value in bitcoin, and they’re far less concerned about price volatility and market manipulation than they were before.
Massive institutional players including JPMorgan Chase & Co., Deutsche Bank, Citibank and Guggenheim Partners have publicly come out in support of bitcoin. Grayscale now owns more than 630,000 bitcoin (3 percent of the total bitcoin supply), mainly on behalf of accredited and institutional investors.
Insurance company MassMutual placed $100 million of its assets in bitcoin. Legendary investors Paul Tudor Jones and Stan Druckenmiller have disclosed personal positions in bitcoin as a store of value. Publicly-traded companies Square and MicroStrategy have placed treasury reserves in Bitcoin, and many more will follow.
Regulatory and infrastructure improvements have made this possible.
In 2017, even if a public company wanted to buy $500 million worth of bitcoin, there wasn’t any easy way to do it, and storing that bitcoin would be an operational and security nightmare. This is no longer the case. MicroStrategy was able to buy about 38,000 bitcoin with minimal slippage and market participants didn’t notice.
Banks can now custody bitcoin, and institutional-grade bitcoin custody solutions have been built since 2017 by companies like Coinbase, Gemini, Fidelity, Anchorage and BitGo, among others. Liquidity providers like B2C2, Genesis Trading and Jump Trading, as well as OTC desks like Cumberland, are all mirroring the order-routing and execution services that exist in traditional markets.
Many of these companies are racing to consolidate these services and build a prime brokerage similar to APEX Clearing for traditional markets and to capture increasing institutional demand.
The increase in institutional investors has legitimized bitcoin for everyday people. Retail interest is starting to spike, but it’s nowhere near where it was in 2017.
Source
Conclusion
The narrative shift from trading to accumulating, combined with the increasing presence of institutional investors, are making this bullish cycle far different from any previous ones in bitcoin’s history.
Bitcoin is no longer a speculative collectible that people gamble on in hopes of making a quick buck — instead, it’s becoming a true store of value alternative to gold that institutions, corporations and consumers are accumulating to protect and grow their wealth over time.
This is a guest post by Abhay Aluri. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
With the effects of the COVID-19 pandemic economic meltdown further fueling the rise of Bitcoin and cryptocurrency as an investible asset class, three giants of the crypto industry have announced plans to go public in 2021 and take Wall Street by storm.
The crypto industry is finally making the leap to mainstream investment on Wall Street. In 2020, major financial service and payments companies like JPMorgan, PayPal and Mastercard have been creating new avenues for public exposure to Bitcoin and crypto.
Major institutional investors and enterprises such as Microstrategy and MassMutual Insurance have also been allocating serious amounts of capital to Bitcoin and crypto, mainly as a hedge against the weakening dollar and impending inflation due to stimulus payments and unprecedented relief spending of governments around the world.
As cryptocurrency and Bitcoin surge into public and institutional consciousness, three large companies in the crypto space have announced or hinted that they are planning to launch an initial public offerings (IPO) to raise money on public markets.
As the United States Federal Reserve and central banks like the ECB continue to hold interest rates at record lows, the inflation narrative is gaining strength and going public in 2021 could be the tipping point for these crypto firms seeking public listing.
Ripple
In January this year, Ripple CEO Brad Garlinghouse predicted that initial public offerings (IPOs) will become more prevalent in the cryptocurrency and blockchain space in 2020.
While speaking at the World Economic Forum in Davos on, Jan. 23, Garlinghouse went as far as to hint that Ripple would itself be one of those firms to seek a public flotation. Garlinghouse said at the time:
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company.”
Unless you have been living under a rock in the crypto-sphere, it goes without saying that Ripple’s plans are currently up in the air with the ongoing Securities and Exchange Commission (SEC) lawsuit against the sale of XRP tokens as unregistered securities.
Unclear regulation towards altcoins like XRP along with its current regulation battle would make it incredibly difficult at this point to gain public confidence for investment into a Ripple IPO.
Coinbase
The most well-publicized and likely planned IPO for 2021 comes from major United States crypto exchange Coinbase.
The long-anticipated Coinbase Initial Public Offering (IPO) was finally filed on Dec.18 and now awaits the review and approval of the Securities and Exchange Commission (SEC) before the filing will be made public.
Coinbase is looking to go public in the coming months and submitted a draft registration (S1) form to the Securities and Exchange Commission (SEC), which read:
“Coinbase Global, Inc. today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”).
The Coinbase public offering is causing a stir in the markets and Coinbase (CBSE) pre-IPO contracts for the leading United States cryptocurrency exchange is currently trading at a projected valuation of nearly $70 billion dollars on FTX trading—a figure that is equal to three times the total value of the booming decentralized finance (DeFi) market and eclipses the entire marketcap of Ethereum.
Digital Currency Group
Digital Currency Group (DCG)—a conglomerate that owns Grayscale Investments, over-the-counter desk and lender Genesis Global and leading crypto news site Coindesk—is projected to launch its own IPO in 2021.
According to a report from Messari in November this year, a third party that might also soon throw their hat into the crypto firm IPO mix is Digital Currency Group.
While discussions over an IPO have not been raised publicly from DCG’s end, the report crunched down some numbers, which indicated that DCG would present a strong case for a successful IPO.
Owning firms like Grayscale Investments and Genesis Global, Digital Currency Group has built up not only an extremely profitable business but also a good reputation amongst institutional players. This reputation could make an easy sell to raise capital for an IPO in the public markets—but DCG is already a giant and may not even need public funding to succeed.
Messari projects that DCG could be worth over $4 billion should they go public in 2021.
The latest Kraken VIP sentiment survey reflects how professionals and investors are thinking about how the cryptocurrency sector might evolve in the year ahead. Bitcoin price sentiment is at an all-time high with some projecting the BTC price as high as $250,000.
In the Kraken Intelligence 2H2020 Crypto Sentiment Survey released on Dec. 1, the research arm of the US-based crypto exchange Kraken focuses on its VIPS—a diverse mix of brokers, custodians, family offices, hedge funds, market makers, miners and traders—sharing their insight into the state of the crypto market heading into 2021 for any investor seeking an edge.
While there has been a slew of prominent funds and investors like Microstrategy’s Michael Saylor and billionaire investor Paul Tudor Jones making big bets on Bitcoin this year—the Kraken intelligence report indicates that the bullish sentiment has spread to its VIPs and extends to altcoins and the DeFi space.
Bitcoin and Ethereum Price Sentiment
The respondents to Kraken’s sentiment survey offer a bullish forecast for the Bitcoin and Ethereum price in 2021. The high-end estimates for the BTC price appreciation tops at $250,000 while Eth price tops at $15,010. Respondents are optimistic that next year both cryptocurrencies will provide at least 175% returns from October prices.
With the intent of gauging market optimism, particularly in light of what has been a 6-month crypto rally following unforeseen circumstances in the COVID-19 economic disruption from March 2020, Kraken Intelligence asked survey takers for their 2020 Bitcoin (BTC) and ether (ETH) price targets, in addition to 2021 to compare survey-over-survey summary statistics to identify changes.
According to the Bitcoin price targets for 2020 fell in the last half of the year. The Kraken findings show:
“The average Bitcoin price target among 309 responses fell -35% survey over-survey to $14,866, well below February’s average of $22,866. The median price target also retraced -28% from $19,424 to $14,000, and the most commonly cited price target was $15,000, down -25% from $20,000.”
For crypto’s number two—Ethereum—price sentiment was also down in the latter half of the year. The survey reads:
“With respect to ether (ETH), the average price target among 289 responses was $549, off -32% from the previous survey’s average of $810. The median price target was unchanged at $500 and the most frequently cited price target was $500, up +66% from $300. With only 3 months left in the year, we anticipated less optimistic summary statistics and lower standard deviations for both Bitcoin and ether price targets.”
The responses from participants on their 2021 Bitcoin and Ether price targets indicate that the market believes the latest crypto rally has serious legs and will continue into 2021.
The Kraken findings show:
“The average 2021 price target for Bitcoin came in at $36,602. The median price target is $25,000, and the most commonly submitted target is $20,000. Approximately, 8% of respondents provided a price target greater-than-or-equal-to $100,000, roughly 20% of respondents reported a price target greater-than-or-equal-to $50,000.”
Regarding Ethereum, Kraken’s survey participants appear to be even more optimistic of ETH performance next year with close to 59% believe that ether will, at least, hit $800. Additionally, 22% of respondents see ETH surpassing its previous all-time high of $1,595 set in early January 2018 and just under 92% see ether, at the very least, trading higher than current prices in 2021.
Altcoin and DeFi Sentiment
Altcoin and DeFi will not be left behind by investors in 2021, if Kraken’s findings are any indication. Despite tendencies to be highly volatile, altcoins remain front and center for many market participants despite collectively underperforming to Bitcoin.
Respondents were asked which altcoins were their favorite(s) and why. Participants were told to provide no more than 5 altcoins and those with fewer than 10 votes were excluded from the analysis. Approximately 105 unique altcoins were mentioned across 466 entries, with respondents providing an average of 2.5 altcoins.
Polkadot, Chainlink and Monero led the charge after Ethereum as the most popular alternative cryptocurrencies. A big factor for Kraken’s respondents in selection altcoin projects was cited as “community strength.”
Regarding the decentralized finance (DeFi ) space—the popularity of Ethereum, Polkadot and Chainlink reflected the rise of DeFi. Kraken’s respondents are investing in the belief that decentralized finance and reimagined financial products may disrupt the traditional industry. DeFi is also being credited for the increased adoption of stablecoins.
Optimism Ahead
In conclusion, the findings of Kraken’s report show that institutional adoption is driving bullish sentiment in the Bitcoin and crypto space. Almost 70% of survey respondents believe we are now in a bull market and believe that innovation, improvements, and positive regulation will boost their investments in 2021.
According to The Financial Times, the Libra cryptocurrency being developed by the Facebook’s Libra Association could be launched as early as January next year but in a limited format.
In April this year, Libra Association, which now has 27 members including Facebook, intended to unveil an electronic version of several traditional currencies, plus an electronic digital composite of all itscoins. This came after global regulators raised concerns over the Association’s initial plan to create one synthetic stablecoin pegged to a basket of government bonds and fiat currencies.
But now the Association only plans to launch a single coin backed by the US dollar. The other currencies and the composite would be rolled out later in the future.
However, the exact launch of Libra cryptocurrency would depend on when the regulator (the Swiss Financial Market Supervisory Authority) approves the project to operate. Such approval could come as soon as January. FINMA stated that it would not comment matters on Libra’s application whose licensing process was initiated in May this year.
Although the limited scope may appease wary regulators, critics have laid complaints that a move to launch a single-currency coin could hit customers seeking to convert currencies with additional costs, thus undermining its far-reaching ambition to enable greater financial inclusion by empowering billions of people and addressing the needs of the poor and unbanked.
Libra Cryptocurrency Facing Greater Hurdles
Facebook released its white paper in June 2019 with a mission to launch a simple financial infrastructure and global currency in the first half of 2020. However, the announcement received skeptical reception from financial regulators around the world, saying that Libra digital currency backed by traditional money and other assets could threaten the world’s financial stability and monetary system and hinder cross-border efforts to fight terror financing and money laundering and throw up problems for privacy, taxation, and cybersecurity.
Facebook’s cryptocurrency efforts have been met with questions and doubts almost from the time the company announced it in June 2019. The troubled cryptocurrency initiative suffered new blows in October 2019 as the departures of key founding members became an exodus. Visa, Stripe, eBay, and Mastercard dropped out of Libra, a week after PayPal became the first company to pull out from the controversial project.
