7 Solid Crypto Predictions For 2021
By David - January 02, 2021
Throughout 2020, Bitcoin had been in the news for both good and bad reasons.
We saw the flash crash to $3K, and now, Bitcoin is hitting all-time highs effortlessly.
Now, let’s review the possibilities that can happen in the crypto space this year.
1: Bitcoin’s Market Cap Hits $2 Trillion
The crypto market space is already over $700bn and Bitcoin is responsible for 60%+ of its size. With institutional investors entering the space and the Bitcoin adoption curve easing, Bitcoin is showing that it’s got the leverage to do this in late 2021.
But when you think about it as Bitcoin’s market cap doing 4X to accomplish $2 trillion, doubt starts to creep in.
It’s already difficult for Bitcoin (due to its size) to double itself as it did in its early years. So, how could Bitcoin’s market cap do twice the effort in 2021?
Institutional investors seems to be the answer.
With their involvement, Bitcoin’s growth and influence can get accelerated on short notice.
2: Ethereum Leaves Bitcoin’s Orbit
Ethereum is a digital gas giant that’s showing signs of becoming the first truly independent crypto we’ve ever seen — the first significant crypto to influence bitcoin and others.
Ethereum DeFi’s (decentralized finance) market cap is already over $20bn — that’s 2X Litecoin’s market cap.
If just a new portion of Ethereum is beginning to dominate the crypto space, it’ll be interesting to see how the public starts to view Ethereum.
Plus, the fact that Bitcoin is on the Ethereum blockchain via WBTC (Wrapped Bitcoin) indicates that Ethereum is capable of much more than we originally thought.
Etheruem’s market cap is almost $100bn.
If Bitcoin’s market cap doesn’t significantly grow while Ethereum’s does, the BTC-ETH correlation could be over.
3: Bitcoin Goes Back To $20K
When people look at a Bitcoin chart, their biases will influence them and provide the logic for them to have many different price predictions.
This is why people believe $50k and $100k prices are soon to come.
But, if you remember how Bitcoin performed during 2017, you would know that when BTC goes up a lot really quickly, it somehow comes crashing down:
So, it’s realistic to expect a big pullback right after the rally ends.
Then again, nobody knows where the top is until stronger consolidation takes place. Therefore, Bitcoin could ride much higher than we expect before it corrects.
4: The SEC Goes After More Cryptos
The SEC is coming after entities associated with ripple because of its illegal $1.3bn ICO in 2013. So far, Ripple’s executives and Coinbase are being sued and investigated.
This event has caused a mass movement of exchanges delisting Ripple. Institutional participation has also joined as Bitwise is dumping XRP too.
So, with the SEC cracking down on Ripple, it’s very likely they’ll attempt to find more cryptos that ran ICOs years ago. Especially, the cryptos with large market caps.
5: Fiat Digital Currencies To Rival Bitcoin
With the world going digital and cash becoming less accepted (and used), it sets up a world for the digital dollar and other digital fiat currencies to takeover.
Digital currencies have been in development for years, and now we’re seeing serious progress, especially with the digital dollar and the digital yuan.
Here’s why digital fiat and Bitcoin will begin to clash:
As soon as the majority realize the privacy and ownership differences between normal fiat and digital fiat, people would immediately look to Bitcoin as a way to have 100% control over their money.
This scenario will force people to learn more about crypto and get involved in it.
In 2019, it was reported that only 19% of the world own cryptocurrency — that 19% will be turned into 60%+ if digital currencies become the norm.
6: Alt Season 2.0
In 2017, we saw coins do 10x, 100x, and even 1000x. The same sequence of events have been occurred in 2020 for alts to have their crazy bull run.
The question is when?
Most long-term crypto users are expecting it to happen by now. Some even say it’s overdue.
Bitcoin and Ethereum have both played their parts to generate large retail and institutional interest, so there’s large confidence in it happening.
However, here are the possible reasons alt season isn’t happening as we’re expecting it to:
- People are aware of the cryptos that have value
- People bought into cryptos in 2017 and lost money
- 3x is the max altcoins are going up in this alt season
During the first alt season, people were buying crypto after crypto because they were hoping to catch the next bitcoin.
This retail investor psychology is no longer present in the masses.
A new sell is needed.
A more realistic sell for alt season 2.0 to kick off is if another legit DeFi project produces the same results as Yearn.Finance — go from $6 to $43,000 in 2 months.
That will get retail investors and institutions hunting DeFi coins in a very short period of time.
7: Bitcoin Hits $100,000 In December 2021
The Bitcoin price is following the stock-to-flow ratio (S2F) almost perfectly and that lets us know that 1 Bitcoin priced at $100,000 is not an illusion.
As you can see, the rally upwards still has strong momentum to keep going higher up to $100k.
The question is, will it continue to follow the S2F path once it gets there?
Due to heavy institutional investment, there’s thoughts of Bitcoin not slowing down after it hits $100k.
Also, the stock-to-flow ratio was created 10 years after Bitcoin was made — it had a 10-year hindsight. It’s only been 2 years since the S2F ratio was presented by PlanB.
This suggests that Bitcoin could deviate from the S2F ratio very soon.
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