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Bitcoin, Crypto Stocks, and Digital Assets in 2021
This is my first long form post making some predictions for the new year. I figured why not share my personal overview for the markets, crypto, bitcoin, and stocks. Many others share outlooks, often with mixed results. So I have about as much chance as anyone else to be correct…
Skip to the end of this post if you are looking for the TLDR (too long didn’t read) version.
I am first going to assume we do not have a repeat of 2017, and there is no great crypto crash. All my assumptions and predictions below hinge on Bitcoin being in a bull market for 2021. There will be some healthy consolidation (one hopes) along the way, but no significant crash.
We have sometimes seen Bitcoin follow the stock market in the past. It still might sell off if the traditional market does, but I think to a lesser extent.
The coronavirus will come and go over the next few months, but by the time the Spring comes, people will be over it mentally. I first wrote about the coronavirus way back in February of 2020. I got many things right, and some I got wrong. The data changed over time as well. I don’t quite look at the virus now like I did then.
As of today, I believe the lockdowns will continue to some extent, but I expect stronger push back if they go too long. People want to travel, they want to have weddings, and they want to see friends and go to restaurants. So I believe that, with or without a mutation, or proper vaccine, by the start of Summer people are going to accept whatever is going on. The majority will be ready to return to previous norms. I also don’t think the virus is going away anytime soon, it could be our new seasonal flu.
Additionally, we need to look at why coronavirus was so deadly for the United States versus other countries. I will go out on a limb and say a major factor is our poor health. The country eats terrible and is obese. I try to watch how I eat and still do a bad job, we all need to do better. Our death toll would have been even worse if not for our superior healthcare. It is a shame so many people don’t want to talk about our real health crisis, which is not the virus, but our lack of physical exercise and terrible eating habits. Any legitimate doctor will tell you that is the real health issue in this country.
There will be more bailouts and spending of money by governments around the world, especially in the United States. This will be a positive for Bitcoin and other digital assets. I personally think the value of the dollar is eroding more than the official figures show. Just in seeing what things cost and talking to friends. I constantly hear people say things like; “the cafe started charging almost a dollar more for the same coffee and muffin I always get.” or “My accountant went up on his prices.” And, “my landscaper went up $5 for cutting the grass for next year.” I know this is anecdotal, but I think we are seeing the dollar lose its value, or inflate, more than what the numbers are currently showing. Perhaps the data will catch up, or maybe I am wrong. It is just what I see on the street talking to the average Joe.
My next point I am going to write a separate post about. But as I have hinted here before, I don’t think Wall Street and Billionaire involvement in Bitcoin is totally a good thing. It definitely is good for the price. But this narrative that maximalists and others keep pushing about how Bitcoin is, “going to revolutionize money”, and is “helping the common man”, is just not true.
I want the price to go up like everyone else. But we need to be honest, 2% of accounts own 95% of the Bitcoin that is currently in existence. The average person will never own more than a tiny piece of Bitcoin, if they can even afford that. Never mind that as the price keeps rising, the government keeps getting more involved and will make things more difficult. I think this year more people will wake up and stop fantasizing that Bitcoin is going to save poor people in Africa. Anyway, check back for that new post in the coming weeks.
China and Chinese mining companies control a large number of Bitcoin and over 50% of the mining. The rising prices will benefit them more than any other government or country. As the price continues to rise, they may become more aggressive with their operations and control. I don’t know how that could impact the future of Bitcoin, if at all. But it is something I want to dig into more. It is also a reason I often think Ethereum might have a brighter future.
More Crypto and Stock Predictions
The whole bitcoin vs gold debate will continue. 2021 might start to show what the future holds for both assets. Do younger investors really prefer bitcoin? Will both go up together, or will one reign supreme?
Ethereum is having a nice run. Currently approaching $800, but still far off its all time highs. ETH has a bright future. It is essentially building the foundations for a new world wide web platform. It is a smart and programmable digital asset. Developers prefer it, and one can build all kinds of applications that run on top of it. Ethereum has also started the transition to proof of stake.
Proof of work is Ethereum currently operates, which is like Bitcoin. So the miners out there mint new coins as they make complex calculations and perform all the transactions on the network. Proof of stake is different, it cuts out the miners, and offers some other benefits. Though it still has many critics. I believe that retail and instiutional investors will invest in Ethereum at a faster rate in 2021.
I also think this is the year we finally get a Ethereum ETF. We will also see Bitcoin ETF get approved.
I largely missed the whole De-Fi move last year, and honestly need to read up more on it. I understand De-Fi in general but need to research the best options. It makes sense to me that it will continue to grow. But I cannot opine more because I need to investigate it some more. Watch some of the tokens in the space though this year.
Coinbase will IPO. I am thinking it will be a direct IPO, at least I hope it is. The Coinbase IPO will be the biggest IPO of the year and the price will go parabolic. Perhaps it will be the next Tesla type stock. I think we will see other new crypto stocks on the US market.
We will see some stocks, like Galaxy Digital stock, uplist from the OTC markets to the NASDAQ. These crypto related stocks will all be very hot in 2021 as people position their stock portfolios now for the future gains in this growing sector. For my friends in other countries, like India. Many of you can purchase shares on the US and Canadian markets. There are about 20 Crypto related stocks right now available, and more are coming.
Polkadot might be a crypto token to own. It has already had some massive moves this year in price, but seems to have some more upside opportunity. I hope to do a research post on Polkadot soon.
I would like to see 0X, which uses the ZRX token, get some more utilization and new momentum. I have held the token for some time and it is one that I still think has promise.
Many of the older, and newer, alt coins will continue to fade away. With a few of the better known ones getting a boost off the Bitcoin price. People are getting wiser now as to which coins have no value. Although, there are still many pump and dump scams out there.
Traditional stock markets will continue the bull run. We will reach new highs. At some point we are bound for a correction, however I think it will be short lived, and once again the market will rocket higher.
Gold, Oil, and Silver will all have a good year.
Cannabis stocks will rebound and have a good year. I also like water stocks and ETFs.
Crypto is still too difficult for many people to understand, buy, or use. But it will continue to improve in 2021.
I think we will see more crypto credit cards. This sleek looking metal credit card from BlockFi and Visa got a lot of media buzz recently.
With Ethereum staking giving investors a return of 5% to 10%, people will consider crypto, rather than bonds or certificate of deposit. Crypto interest rates are better and as more people understand it, they will consider it for the superior interest rate. BlockFi currently offers almost 9% for your crypto.
The TLDR List
To conclude this post, I will list my 2021 Crypto and stock market predictions. I will also summarize a few things I got right, and wrong, in 2020. So here is my summary:
- Bitcoin will reach $50k.
- Ethereum will see new institutional investors, and will reach $2,500.
- Galaxy Digital Stock will uplist in the US and will reach C$50.
- Crypto related stocks will have a great year.
- More people will lend or stake their crypto for the superior interest rates.
- Further government spending and dollar erosion.
- How will China affect Bitcoin? They control most of the mining.
- The narrative that Bitcoin is for the people, and here to help the poor, will erode.
- Government will get more involved in Crypto and Bitcoin regulation.
- Wall street will drive up Bitcoin value, which also means more of the same.
- We will get more clarity on the Bitcoin vs Gold debate.
- Bitcoin and Ethereum ETFs get approved.
- The Coinbase IPO is the years biggest.
- Gold, Oil, and Silver will have a good year.
- The coronavirus is not going away, perhaps it is the new flu.
And here is a few things from last year that I got right and wrong in 2020:
- I predicted President Trump would lose if the virus was not handled well, and was still around.
- I wrote that local, state, and federal governments were all responsible for being unprepared for the virus. They were all unprepared and all pointed the finger at each other.
- I thought that the virus would be more deadly than it was. It currently has a 99% overall survival rate.
- I was convinced that oil would crash, which it did in April. I made a good bet on that.
- I thought Gold and Silver would go even higher than it did.
- I believed that the market would go lower than it did and not recover as well as it did. I really got that wrong, as the market kept climbing and I kept waiting for it to drop again.
- I told people to buy Bitcoin and Crypto, thinking it was going to rebound, and it did!
What are your thoughts? Any Predictions? I am curious to hear feedback and what others think so comment below if you want.
Well that is it for now. As usual, nothing here is advice. I am not a professional advisor. Do your own research.