With the year winding to a close, analysts are dusting off their crystal balls – in an attempt to peek into the future and discover what 2021 has in store for the world of crypto.
This time, it was the turn of major investment firm Blockchain Capital, which appears to be turning its year-end predictions about the year ahead into a regular event.
Kinjal Shah, the company’s investment and research team Senior Associate wrote, in a tweet,
“On a macro level, 2020 brought unprecedented levels of money printing and debt, yet bitcoin (BTC) decoupled and outperformed equities and risk assets.”
In its 2020 Year in Review document, the firm made the following 10 predictions for what they think might happen in 2021, namely:
- Coinbase debuts as the first IPO in crypto, market capitalization surpasses USD 30bn
- Industry sees two acquisitions above USD 500m and one acquisition above USD 1bn
- USD-pegged stablecoin market issuance (tether, USDC, Libra) surpasses USD 150bn (today, it's around USD 25bn)
- The combined market capitalization of top three DeFi governance tokens increases from 33% to 66% of ethereum (ETH)’s market capitalization (today, it's over USD 62bn)
- Loans outstanding in DeFi protocols increases by 10x, surpassing USD 30bn
- 33% of all crypto exchange spot volumes will come from DEXes (decentralized exchanges)
- WeChat Pay and Alipay support China’s digital yuan
- The American regulatory Securities and Exchanges Commission approves first bitcoin ETF (exchange-traded fund) and first custodial digital asset broker-dealer
- Bitcoin market capitalization grows from 4% to 10% of gold’s market capitalization
- "MicroStrategy rebrands to MacroStrategy:)"
Although the last prediction was accompanied by a smiley emoji, it does seem safe to assume that the American software firm will continue to make waves in the world of crypto.
But what of the track record of the Blockchain Capital soothsayers?
The firm gave itself a somewhat contestable score of 4 out of 11 for its 2020 “bold predictions,” most of which proved – sadly – wide of the mark, although not by much in some instances.
Here’s what the analysts predicted this time last year…and what actually happened:
1.A crypto company is acquired for more than USD 500m
Not yet, but it seems only a matter of time before this one comes to pass - this year, Binance acquired CoinMarketCap for reportedly USD 400m.
2.Value locked in DeFi hits USD 5bn
2020 has been the year of DeFi – a breakthrough year with billions of USD locked into a range of protocols. Today, it's over USD 14bn, per Defi Pulse data.
3. In the face of competition from China, Libra will receive the green light for a dollar-backed stablecoin
Unfortunately for Facebook and friends, Libra (now developed by Diem) might get its first regulatory node only next year. However, it might happen as soon as this January.
3.A federal judge rules against the SEC in a crypto case
Not even close.
4.Not a single 2020 Layer 1 (or the base protocol) network launch achieves "top 10” status, as defined by network value
Missed the mark on this one, too.
5.USDC sees 300%+ growth (as measured by transaction value, issuance, market capitalization and trading volume)
Correct. It has been a big year for all the leading stablecoins.
6.Demand for bitcoin transactions drives fees to exceed USD 100, catalyzing scaling up the stack
No. The average fee managed to hit USD 13 in October, but it dropped to around USD 4 during a rally in November.
7.FinCEN / the Financial Action Task Force (FATF) hold stablecoins to a stricter standard than paper cash by requiring the broad application of the Travel Rule
Bingo. It’s been a big year for the Travel Rule, which the FATF seems to want to apply across the board.
8.KYC / AML (Know-Your-Customer and Anti-Money Laundering) becomes the primary regulatory battleground for DeFi
Not yet, but there were certainly rumblings on this front from the FATF at the recent V20 summit, too.
9.Privacy coins are de-listed from major exchanges
Blockchain Capital marked this down as a miss, but perhaps the company should have been reading Cryptonews.com a little more carefully, as South Korean regulators have booted privacy coins into touch, following similar moves in 2019 in the UK, this time from exchanges themselves.
10.Bitcoin price blows past all-time high
Yes and no, depending on who you ask.
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And here are more forecasts for 2021:
Crypto in 2021: Bitcoin To Ride The Same Wave Of Macroeconomic Problems
Crypto Adoption in 2021: Bitcoin Rules, Ethereum Grows & Faces Rivals
Crypto Regulation in 2021: The Piecemeal Approach & New Winds
Crypto in 2021: Institutions Prefer Bitcoin, Retail Open to Altcoins
Crypto Tech In 2021: Focus on Scalability, Privacy and Usability
Crypto Security in 2021: More Threats Against DeFi and Individual Users
Messari Boss Names 10 Key Crypto Trends for 2021
Also, tomorrow, on Cryptonews.com, read what crypto exchanges are preparing for 2021.