The start of a new decade is ending in impeccable style for every Bitcoin (BTC) holder as the price set an all-time high of $19,788 on November 28th, 2020, raising the world’s notice once more since its 2017 heroics. However, this time the journey to the top was a lot different from 2017 given that markets are already mature and institutions are starting to join in.
Speaking to Business Insider, Craig Erlam, a senior market analyst at Oanda, praised the resistance shown by BTC bulls saying,
“A move into uncharted territory and the psychological boost that would come with a move like this could propel Bitcoin aggressively higher.”
Altcoins also witnessed a strong growth period across 2020 – the largest of them all, Ethereum (ETH), recording over 3X growth – mainly fueled by the surging DeFi market.
In this article, we focus on the raging crypto bull market, Bitcoin’s all-time high run, predictions on future prices in 2021, and the overall state of the market in the future.
A new dawn for Bitcoin: Can this rally last?
On March 12th, the overall crypto market faced its worst daily percentage drop as BTC plummeted to sub-$3,500 levels as critics prophesied the death of BTC. However, across the year, BTC markets remained resilient since the Black Thursday crash despite the network experiencing a halving and the global pandemic changing investors’ lifestyles.
● The institutional bull momentum
Unlike the 2017 crypto bull run which was mainly caused by retail investors’ FOMO into the market, this time it seems the run was massively influenced by institutional investors. Grayscale, a digital assets institutional investment firm, announced on December 4th the total Bitcoin assets under management now stands at $10.5 billion, after adding over 7,000 BTC in their coffers in a day.
12/03/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) December 3, 2020
This, alongside recent BTC purchases by PayPal (who started buying and selling crypto on their platform) and Square (who integrated Bitcoin purchases to Cash App) shows the impact of institutions in shaping up the raging Bitcoin bull market.
● A billionaire’s fantasy
Not only were big corporations and institutions staking up but high net worth individuals as well. One widely shared story on Bitcoin purchases is Michael Saylor, CEO at MicroStrategy, who purchased over $275 million of Bitcoin while influencing a big part in his company holding BTC as a Treasury reserve asset.
Following a $475 million purchase of Bitcoin in October, MicroStrategy has recently announced plans to leverage a $400 million convertible note from the Fed to add to its stock of treasury reserves – a first mega-move of its kind.
● The DeFi surge
Finally, the crypto industry also witnessed the absurd growth of the decentralized finance (DeFi) ecosystem which played its role in boosting the crypto market. According to DeFi Pulse, the DeFi space experienced a magnanimous growth of over 2500% in 2020 with the total value of assets locked (TVL), rising from a low of $559 million on March 13th to nearly $15 billion at the start of December.
Ethereum is the biggest beneficiary of the DeFi boom given that most of the applications are built atop the blockchain. The second-largest token crossed the $600-mark in November, setting a three-year high of $635 according to Phemex exchange data.
A spike in trading volumes on centralized exchanges
In November’s monthly report by Coingecko, trading on most centralized crypto exchanges recorded yearly highs following the surge in crypto demand across the market. Notwithstanding, in Q4 2020 the crypto community welcomed the use of decentralized exchanges such as Uniswap, Sushiswap, and Paraswap.
The top centralized and decentralized exchanges monthly trading volume witnessed a growth rate of 97.8% setting a new high of $348 billion in spot trading volume. The bullish tide also carried the smaller exchanges, whereby others such as the Phemex exchange doubled their trading volumes in November. The Singapore-based exchange registered a 109% month-on-month growth rate on its BTCUSD pair trading volumes as of November 30, Coingecko data shows. ETHUSD trading volumes on the exchange saw an even more impressive growth – rising 150% month-on-month to $3.96 million.
A continuous bull market for Bitcoin?
Bitcoin’s bullish market momentum has since slowed down after hitting all-time high levels – with the price stabilizing below the $18,500 mark. However, several analysts are still predicting a continuation of the bullish momentum to set the price past the $20 K psychological level. According to Bloomberg analysts, the price of BTC could hit $50,000 in its next bull run in 2021 implying a trillion-dollar market cap for the cryptocurrency.
All in all, with the crypto markets threatening a possible bull run in 2021, investors, institutions, and users aim for newer highs on Bitcoin and the crypto market as well.
Taking advantage of the next bull run
If there’s another bull run (or we are still in one), you need to be well prepared for it. Understanding the spot and futures market, having a secure wallet, finding a user-friendly and well-regulated exchange, and low-cost trading fees are crucial to a profitable journey in crypto. Phemex offers all these qualities plus more features to make your crypto trading as seamless as possible.
As a fully regulated Money Services Business (MSB) provider with the Financial Crimes Enforcement Network Department, Phemex allows both retail and institutional investors to trade multiple cryptos and other financial instruments. The exchange offers three main trading markets – spot trading, contract trading (with up to 100X leverage), and simulated trading (the demo version to help learn to trade).
You can find more on trading on the platform here. Fees and terms of trading are also explained on this page.