Bitcoin and Ethereum trend forecast for 2021 according to Crypto.com analysis
Crypto.com has reviewed the cryptocurrency highlights of 2020 in its annual market review. Most interesting is what the Bitcoin and Ethereum forecast is for this year.
The report also makes some Bitcoin Formula predictions about cryptocurrency trends in 2021, and it is interesting to see what the analysis concludes about the development of the leading cryptocurrencies Bitcoin and Ethereum.
Bitcoin is still in the midst of growth
According to Crypto.com’s annual report, the cryptocurrency market is still in its infancy. It found that there are only about 73 million crypto users worldwide. This represents just 1% of the world’s population.
World map for crypto adoption in early 2021
Although Bitcoin and the entire crypto market has grown rapidly, reaching $1 trillion in capitalisation last year, the size of the market is still tiny compared to traditional financial markets. For example, pension fund assets in 37 OECD countries alone amount to $32 trillion, dwarfing the total market capitalisation of cryptocurrencies.
The report suggests that investors should expect a continued inflow from new market entrants and institutional investors. One of the strongest indicators of rising institutional adoption in 2021 will be the growth of Bitcoin’s options market, which should appeal to traditional finance. For example, by the end of December 2020, Bitcoin options open interest had already reached a whopping US$6.2 billion.
Crypto.com has also analysed Ethereum in more detail. The company’s report predicts that the growth of decentralised finance (DeFi) will continue in 2021. In addition, the company expects DeFi projects that are easy to invest in, such as aggregators and decentralised asset managers, to gain popularity.
Chart on the development of assets in DeFi
On the negative side, the report highlights the fact that Ethereum is „in dire need of improving scalability“. Layer 2 solutions such as Plasma, Sidechains, ZK rollups and Optimistic rollups are already underway. Nevertheless, the company predicts that some applications will migrate to competing blockchains for greater efficiency.
Crypto.com additionally noted that Ethereum should also see a continued upswing in non-fungible token (NFT) trading. In particular, with digital artworks and crypto collectibles.