This past year will forever be marked, as the global pandemic took hold of everything, from our health and safety to financial security. It was a year of mass economic devastation, of ineptitude at the highest level and agitation for change growing from the bottom up.
It was also a year that crypto came into its own – perhaps because it is the people’s money, unfettered by dysfunction at the top. Despite a minor scare in mid-March – when Bitcoin collapsed 55% in one day, bottoming at $3,782 – it quickly bounced back, and even (perhaps ironically) gained recognition as a safe haven asset. Hedge funds, billionaires and publicly-traded corporations have allocated treasuries to Bitcoin, to say nothing of the little guys.
This post is part of CoinDesk’s 2020 Year in Review – a collection of op-eds, essays and interviews about the year in crypto and beyond. Ray Youssef is CEO and co-founder of Paxful.
This year, the on-ramps got bigger and easier to use, and more people than ever have begun holding and trading cryptocurrencies. And, as online wallets and apps continue to improve, we will likely see more people enter the fold in the coming years.
Nearing the end of 2020, several headlines rocked the cryptocurrency world. The biggest, perhaps, was news that PayPal partnered with Paxos to bring crypto functionality to its 300 million plus users. While the service was limited to a few large-cap coins – bitcoin, ether, litecoin and bitcoin cash – it drove a new bitcoin rally and reignited a conversation over the mass adoption of digital assets. This renewed confidence will only continue to gain momentum as we cross the threshold into 2021.
Then there were the institutional high fliers who changed their outlook on bitcoin. Legendary hedge fund manager Paul Tudor Jones committed to storing a percentage of his net worth in bitcoin, while a leaked internal document from Citibank revealed that a senior analyst predicts Bitcoin could reach $318,000 by December 2021.
See also: Byrne Hobart – PTJ on BTC: Bitcoin Is Now the Macro Big Bet
As participation from the largest names in traditional finance continues to expand, 2021 will see limitless possibilities and further news of high-net worth individuals betting on bitcoin. And, while bitcoin trading has not reached a volume where it is stable enough to be considered a true safe asset like gold, it has and will continue to show more and more inflation-resistant characteristics.
It’s likely that bitcoin and other cryptocurrencies will start decoupling from traditional assets, which may drive more institutions to add BTC to their treasuries. While additional fiscal stimulus was paused by a divided U.S. government, this only resulted in pressure on the Federal Reserve to expand its balance sheet and pump trillions of dollars into the global economy.
It’s for all these reasons and more, Bitcoin has a chance to continue to take…