With a formidable year for the history books, 2020 started off with the end of friendly China / US trade relations, the assassination of the Iranian General Qasam Soleimani and the start of an ongoing global pandemic.
Bitcoin had started the year after having failed to make new highs in 2019, with a lot of work to do in getting to where it has today. The asset has a 600% range in 2020, with enormous volumes traded.
Luckily for our clients, we also wrote our 2020 predictions which for this writer included
- Bitcoin will break the 2017 high
- Bitcoin will converge with traditional finance
- Blockchain on Quantum Computing is explored
- De-centralised finance becomes viable
To put it bluntly, a 100% strike rate can’t be too bad!
2021 brings new challenges for the industry with a high probability of increased volatility in traditional markets, a risky environment but risk-assets being bid, and potentially the end of central banking interventions.
2021 is a year that we expect to see
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Things get silly in traditional finance
Market acceptance of unresolvable structural problems associated with central banking interventions is vaguely emerging towards the end of 2020. We expect the cat to be fully out of the bag in 2021 and this has enormous implications for all markets and the global financial system – especially digital assets.
Bitcoin crack the holy trillion dollar market cap
The way that the US dollar has been falling lately, along with the intention to pursue higher inflation rates, the massive debt overhanging the global economy and seemingly kamikaze policy responses lead us to believe that serious interest in Bitcoin will continue next year, swiftly bringing its value in line with something usable for a no-longer speculative minor financial system.
Nobody can really use a $500 billion monetary value system, it’s still a speculative level of liquidity for a financial system. A trillion is a decent base and 2-3 trillion is reasonable when our next two components mature (next-gen decentralised computing and de-centralised finance), perhaps in 2022.
De-centralised computing platforms
- Large price gains in 2021
- Next generation platforms developed
Bitcoin exists as a fundamental source of monetary value, the bedrock of the digital asset ecosystem. The synergistic value-add of a properly functioning de-centralised computing platform with answers for the blockchain tri-lemma is enormous. We expect to see movement on this next year on multiple fronts and that this maturation should lead to enormous gains in the right projects; potentially Polkadot, Cardano and Algorand as well as Ethereum.
- Has achieved proof-of-concept
- Enormous synergy between Bitcoin, next-gen de-centralised computing and de-centralised finance
Now that de-centralised finance has been proven as a concept, in 2021 we expect to see the evolution of defi on next-gen de-centralised computing platforms.
If this doesn’t have you salivating, you haven’t been paying attention.
The increased monetary base of a bullish bitcoin, making serious inroads in the blockchain tri-lemma and the proof-of concept of de-centralised finance could be the greatest synergistic trio of anything we have ever seen; anywhere.
In addition, this is a self-contained fact. This is true BEFORE the environmental market and economic conditions we expect to see next year. These conditions are, to put it lightly, extremely bullish for this synergy.
More Aggressive Attempts to Control Digital Assets
With a terminal decline in the US dollar incoming in 2021, the sometimes mafia-state USA will be inclined to do anything to fight, firstly the decline of status in the US dollar (if not the value) and the rise of uncontrollable competitors such as Bitcoin, secondly to maintain the control of data, individuals, organisations and nation-states access to global financial markets and thirdly to maintain the power of centralisation, of the pre-eminence of the authoritative hierarchy.
This order, of defending the US dollar, to maintain control of information and market access and lastly to defend the power of this model of power could get ugly in 2021. We expect to see the strategy of targeting individuals aggressively to be made examples of, and also expect that this will obviously ultimately fail.
Central Bank Digital Currencies
While one arm of the US goverment attempts to control digital assets (which could make China look more open-minded), there is every likelihood that another researches and develops options in central bank digital currencies.
Other central banks have already taken notice, but with both not wanting to be left behind strategically and the flux we expect to continue into 2021, it would be surprising if there were not many central banking projects before the end of next year – and potentially more than one in use!
A New Global Currency Proposed
On that last note, we thought we might as well go out on a limb here. With the rest of the predictions considered highly likely, this one is a real game-changer.
A new global currency would probably be a digital currency. What would it mean for finance? For banking? What would it mean for Bitcoin? Could it be backed by BTC? Could it usurp BTC? Would you still have a bank account? Would there be new loan and interest markets – and how would this affect de-centralised finance?
What happens when the institutions, with all of their resources take on the greatest financial innovation and phenomenon of all time, making some of it theirs?
Wait and see guys because in 2021, things are going to get spicy!