To summarize briefly, this year was the best for the crypto market. Investors finally realized the true value of the HODL strategy ("buy and hold cryptocurrency regardless of the market situation"), and the volatility was not bad. It cannot be said that this is some kind of unhealthy hype, as in 2017. The positive is reasonable, but moderate.
During these three years, many more professionals have come to the market, and pricing has become much more balanced and fair. I think that there will be no more protracted crises in the cryptocurrency market, as in 2018. Yes, correction is possible, but this is a normal condition that will not be perceived as an apocalypse.
As for expectations from 2021, bitcoin has already been sent to the moon, now it's the turn for other coins. First of all, Ethereum. There will be further integration of crypto tools into the financial industry, and technologies into the real economy.
To move to the next level of global recognition, cryptocurrency needs full legalization in key economies and an exit from the "gray zone". We can also see the continuation of this process in 2021. The main result of the year is the realization that the crypto market has a great future.
"The beginning of a new stage in the crypto industry"
Director of Binance in Russia Gleb Kostarev
The outgoing year was difficult, but at the same time incredibly interesting. Despite the fact that the pandemic has caused irreparable damage to the global economy, for many industries it has contributed to strong growth and development. Cryptocurrencies have broken unimaginable records this year, we have seen a significant increase in awareness, penetration and acceptance. We have witnessed many historical events and changes. All this was just the beginning of a new stage in the industry, which will continue its growth next year.
In the past year, the whole world was waiting for crypto payments to demonstrate explosive growth, but this did not happen. But the entry into the global arena of the payment giant Paypal will give a huge boost to this trend in 2021.
In 2021, the market will remain attractive for institutional and private investors. Not only bitcoin, but also many altcoins will fall into their field of vision.
In 2021, central banks will launch a large number of pilot projects for the introduction of CBDC (digital currency of the Central Bank), and large corporations will begin testing their own stablecoins.
"In 2021, Russia's role in the process of digitalization around the world will be decided,"
RAKIB Executive Director Alexander Brazhnikov
The upcoming 2021 should be a test and decisive year on a very wide range of issues. Obviously, the most significant for the whole world and for Russia in particular will be the results of vaccination, which will definitely manifest themselves in the coming year and will determine the correctness of existing treatment methods, the need for new drugs.
In the field of blockchain technologies, the upcoming year will also play an important role. After public discussions, the Central Bank of Russia will decide on the methodology and functionality of the digital ruble, the directions of its development, implementation and informing citizens about the possibilities of its use. We can say that in all subsequent years, the decisions of 2021 will be implemented. And not only the fact of the digital ruble will depend on how professional, deep and comprehensive the decisions of the Central Bank will be in this matter, but above all what role Russia will play in the process of digitalization around the world.
The digital ruble is not a cryptocurrency. Therefore, the Central Bank will have to resolve the issue of the relationship between crypto assets and the digital ruble so as not to create unnecessary difficulties, questions and perplexities for users around the world in the next few years.
"In the new year we can see the dawn of Ethereum"
Senior Analyst Bestchange.ru Nikita Zuborev
The features of cryptocurrencies in the future will be able to become the basis for their development as an international financial instrument, and in 2021 we can expect positive confirmations of this status. The rhetoric regarding cryptocurrencies has improved significantly in recent years. Even Jay Clayton, the outgoing head of the SEC, recognized bitcoin as a means of accumulation and settlement as opposed to the "inefficiency" of current payment systems.
The Stock-to-Flow model (the ratio of the current supply of an asset to its inflow to the market; the indicator allows you to assess the "rarity" of an asset, and it, in turn, can directly affect the price - approx. "RBC Crypto"), which was first applied to bitcoin by an anonymous Dutch investor Plan B, is often mentioned in expert forecasts recently. One can be skeptical about its viability, but the bitcoin price repeats the S2 °F model with sufficient accuracy to allow for further development of the situation in accordance with the bold forecasts of the Dutch investor. If the scenario continues to be implemented in 2021, then in September we will see a six-figure price of bitcoin.
The risks of the near future are the correction of bitcoin. According to various estimates, it can adjust up to $20 thousand or even up to $15 thousand in some negative scenarios. And do not forget that most of the projects on the market follow the trends of the first cryptocurrency.
Since the beginning of November 2020, the "Fear and Greed Index" of the crypto market has been at the level of "extreme greed". Investors are often irrational in their actions, and react to green or red currency exchange rates quite impulsively. Therefore, we assume that volatility will continue to grow, but trends will not remain constant, and we can move into the correction stage.
Already at the beginning of 2021, the cryptocurrency market may face a decline of 25-30%. Historically, bitcoin lost from 20% to 40% in 2017 and 2019. If the projected price decline occurs, it is likely to be short-lived, as there is demand from institutional investors, and the declining price may attract even more participants.
Also in the new year we can see the dawn of the second most popular cryptocurrency Ethereum. The launch of the zero phase of the transition to a new emission model was successfully held on December 1, 2020, which in the future will solve many current problems of network scalability. And the rapid development of the DeFi segment of the market, built mainly on ERC-20 tokens, contributes to the growing popularity of the platform itself. The market also reacted positively to the planned addition of ETH-linked derivatives to the Chicago Mercantile Exchange (CME) in February, which in the future may provide a large influx of institutional investors into the Ethereum ecosystem.
"In 2021, the growth of the DeFi ecosystem will definitely continue,"
Maria Stankevich, Director of Development of the EXMO crypto exchange
If we talk about the forecasts of the cryptocurrency market in 2021, then I would highlight the following important trends that will become the main drivers of the growth of BTC and altcoins.
The key and main thing I would call the influx of companies from the S & P 500 into the crypto market. Already in 2020, we saw several large purchases of bitcoin, which led to fluctuations in its exchange rate. I am sure that this trend will continue, because today bitcoin is the most profitable investment. And this means that the capitalization of the crypto market will continue to grow.
In 2021, we will definitely continue to observe the growth of the DeFi ecosystem. This year, the volume of transactions in the industry exceeded $270 billion and continues to grow. Many predicted the collapse of the industry and compared it with the ICO scam of 2017. Nevertheless, the fact that 1.7 billion people on the planet still cannot use traditional financial institutions continues to "drive" the industry. It seems to me that next year DeFi will take shape in a more serious market and maybe even become part of centralized finance.
The future belongs to the digitalization of assets, which means that the trend of NFT (unique, non-interchangeable tokens) will definitely come forward. The undoubted advantages of NFT are fast and cheap transactions, NFT interoperability, and decentralized metadata storage.
Needless to say, 2020 was the year of hacker attacks — about $500 million was stolen by hackers. DeFi protocols accounted for more than 20%. It looks like regulators will start paying more attention to DeFi and their compliance requirements. Unaudited smart contracts of projects often have vulnerabilities that can be exploited by attackers. As for the remaining losses, 2021 will definitely be the year of rethinking and implementing additional security measures and custodial services. In addition, we really hope that more and more exchanges will begin to apply AML (anti-money laundering, anti-money laundering measures) and KYC (know your customer, "know your customer") policies in practice, which will make life very difficult for fraudsters.
"An important innovation of 2021 is the appearance of digital analogues of fiat currencies in a number of countries"
Head of the Analytical Department of AMarkets Artem Deev
One of the main events of the coming 2021 in the cryptocurrency market will be the dynamics of bitcoin. Most likely, until March there will be a sharp decline in the exchange rate of the main digital currency - bitcoin may drop to $ 7-10 thousand, but then it will grow again, and by the end of the year it will be able to exceed the current levels. The coin may begin testing a value of $40-50 thousand by the end of 2021.
The second expected event, important for the turnover of cryptocurrencies in Russia, is the entry into force of the law "On Digital Financial Assets". Cryptocurrency owners will have to declare their property in digital assets and pay taxes for them. Cryptocurrency will not be used as payment.
And the third important innovation of 2021 is the appearance of digital analogues of fiat currencies in a number of countries, including Russia. The Central Bank of the Russian Federation announced the appearance of the digital ruble, the EU also intends to introduce the digital euro. The appearance of such a hybrid version of the currency is a step towards reducing the circulation of cash, which fits perfectly into the logic of events in recent years. The growth of the share of non-cash payments in the world is a long-term trend, and digital currencies will become a tool of the transition period to the fact that the cash turnover will decrease rapidly.