The Bitcoin (BTC) network hashrate has significantly surged to another level not seen since the cryptocurrency’s history. Noteworthily, hashrate is the measure of the entire processing/hashing power on the BTC network. So, more mining machines are going online on the cryptocurrency’s network. Meanwhile, this is coming at the time when Bitcoin is posting massive price growth.
However, with every increase in BTC hashrate, the mining difficulty will also increase accordingly to balance the new BTC supply rate.
Bitcoin network hashrate broke all-time-high (7d ma), according to data from Glassnode, an on-chain analytics platform. A further glance at Blockchain.com, the crypto’s network explorer, revealed the hashrate to be 148.727 million terahashes per second or TH/s. The data shows that Bitcoin miners are deploying more advanced mining machines on the network.
This was more likely caused by the growing price of Bitcoin since the past month, December 2020.
Since leading cryptocurrency broke through the US$20,000 level, it has continued to rise gradually. As of January 1, the cryptocurrency closed the day at US$$29,374, according to Coinmarketcap. Fast forward to the present, the price of Bitcoin is well above US$30,000, nearing the US$40,000 level with its current price around US$38,000 at the time of writing.
With such a price, BTC’s market capitalization sits above US$717 billion, which is the major contributor to the US$1 trillion global digital currency market.
BTC Mining Profitability
Following the price performance of Bitcoin, it’s safe to mention that the BTC mining business is currently profitable. Miners are making more profits due to the growing price of the cryptocurrency. Plausibly, this is causing them to deploy more machines on the network, thereby spiking the overall hashrate at 148.727 million TH/s.
Meanwhile, it shouldn’t be a surprise that the next BTC mining difficulty adjustment will rise to an all-time high to balance the ease with BTC mining.
The year 2020 can be summed up in two distinct phases for the digital asset market: a half year of strong growth, followed by a no less sharp decline. Nothing unusual for this ecosystem. Nevertheless, prices remain at higher levels than at the beginning of the year. For Bitcoin, which is the primary asset, we are nevertheless seeing +300% growth over the year, which preserves its status as the most attractive asset in all types of markets.
Today we’re going to look at the top 10 best performing crypto of 2020 so far, that gave huge returns to traders and investors.
1. Hex (HEX) +8870%
HEX is an ERC20 token designed and launched by Richard Heart on 2 December 2019 on the Ethereum network. HEX is designed to be a store of value to replace the Certificate of Deposit as the blockchain counterpart of that financial product used in traditional financial markets. HEX is also designed to leverage off the emerging DeFi (Decentralised Finance) ecosystem in cryptocurrencies within the Ethereum network. HEX uses the Ethereum network for the transaction layer (sending and receiving HEX tokens, as well as interacting with the HEX smart contract), whilst the consensus code and staking mechanism is contained in the HEX smart contract.
Price Analysis Jan-Dec
On November 19th HEX’s Big Pay Day highlights the strong finish to an exciting yearlong launch phase, crediting active stakes with 183 Billion HEX worth over $750 Million dollars. The design intention is never a promise, but seeing HEX perform as designed appears indeed very promising: HEX’s price has gone up 92x vs Bitcoin, 79x vs Ethereum, and 115x vs USD. It did all of this in just 129 days. By design, HEX enriches The Staker Class with a highly attractive APY plus additional rewards.
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this price rally and another factor could be due to HEX addresses a larger market than Bitcoin with superior product fit. The United States and China have over $7.2 Trillion in time deposits. This is a 50% larger market than the peer-to-peer currency market Bitcoin was designed to address where printed cash totals about $5 Trillion.
While HEX might be the first coin to ever have two independent security audits, due to apparent gatekeeping practices by the ever-popular CoinMarketCap HEX has yet to be ranked correctly there. In fact, CoinMarketCap has suspiciously pegged HEX at Rank 201 – appearing buried on page 3. This not only makes it extremely difficult for new investors to discover HEX but also calls data reporting practices into question.
2. Theta (THETA) +2267%
Theta (THETA) is a blockchain-powered network purpose-built for video streaming. Launched in March 2019, the Theta mainnet operates as a decentralized network in which users share bandwidth and computing resources on a peer-to-peer (P2P) basis. The project is advised by Steve Chen, co-founder of YouTube, and Justin Kan, co-founder of Twitch.
Price Analysis Jan-Dec
So far the year 2020 the value of THETA has almost grown 9 times from $0.25 AUD in January 2020. Market capitalization has also more than doubled from $150M AUD million at the start of the year to $297M today. This growth has been thanks to the recovery of the crypto markets in general after a sharp decline in 2018. 2019 up to the start of 2020 was the time coins really took off and recorded massive growth rates. Many have claimed that this may have just been due to the hype and perhaps even a bubble. When crypto prices started to decline, some investors thought it was the end of the coin market, but instead, it has remained very stable. This is because crypto has finally been embraced by institutional investors who have the resources to purchase large amounts of crypto.
From the above chart showing the price of THETA over its lifetime, it doesn’t look much different from that of many other coins in the market. Since January 2020, most coins have gained their value and market capitalization as well for various reasons. It would seem that THETA has also returned huge profits in the year 2020 and it should be interesting to see how it performs in 2021.
Reasons why Theta Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this price rally and recently, the developers released the mainnet update and added smart contract functionality. Also, the team announced the upcoming improvements, including the launch of the Theta Wallet Chrome extension and Theta Token Minter functionality that will allow users to create their own tokens on the Theta blockchain.
3. Synthetix (SNX) +1263%
Synthetix is a derivatives liquidity protocol on Ethereum that enables the issuance and trading of synthetic assets. Each synthetic asset (or Synth) is an ERC20 token that tracks the price of an external asset; for example, each USD token tracks the price of the US dollar (and unlike the other synthetic assets, is fixed at 1). A wide variety of Synths exists within Synthetix, including fiat currencies, cryptocurrencies, commodities, and inverse indexes. In principle, the system can support any asset with a clear price and provides on-chain exposure to an unlimited range of real-world assets. The protocol will enable a variety of trading features including binary options, futures, and more.
Price Analysis Jan-Dec
Synthetix is an Australian project, founded in 2016. The creators of the project went further and developed a system of 2 tokens:
Synthetix Network Token is a token that provides liquidity in the system.
Synths is a token whose value is tied to the price of a real asset (fiat, precious metals, company shares).
The Synthetix Network Token prices have gone up from 1.45 AUD to 15.62 AUD in one year. The long-term earning potentials were +233.23% in one year. In June 2020, the price fluctuated from $7.52. AUD to $14.12 AUD in late November 2020. Synthetix price today is $16.62 AUD with a 24-hour trading volume of $362.42 M and a market cap of $1.40 B.
Reasons why SNX Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this price rally and Staking is another feature that is likely attracting users due to its relatively high annualized percentage yield based on the protocol’s cash flow mechanism. Essentially, the fees that occur from trading on Synthetix are collected and distributed pro-rata to SNX stakers.
The combination of a spike in interest in Synthetix from the Coinbase listing and the platform’s overall rise in user activity likely triggered the +100% rally since late November.
4. Ethereum (ETH) +704%
Ethereum is a decentralized open-source blockchain system that features its own cryptocurrency, Ether. ETH works as a platform for numerous other cryptocurrencies, as well as for the execution of decentralized smart contracts.
Ethereum was first described in a 2013 whitepaper by Vitalik Buterin. Buterin, along with other co-founders, secured funding for the project in an online public crowd sale in the summer of 2014 and officially launched the blockchain on July 30, 2015.
Price Analysis Jan-Dec
Ethereum had the eventful year 2020, with a few technical update hiccups and some interesting innovations. The year 2020 saw the emergence of Decentralised Finance (DeFi), almost all of whose projects are based on Ethereum technology.
The community is eagerly awaiting the ETH2 upgrades that will ultimately ensure that the network has the capabilities to become the blockbuster of tomorrow’s innovative financial products
The coin started the year with the price of only $169 AUD on January 1st, 2020. 12 months later, its price went up by nearly 9 times, currently sitting at $1,450 AUD. While the coin is still not even halfway to its own all-time high, it has made significant achievements towards getting there.
Right after the start of the year, ETH participated in a strong rally that took its price from the mentioned level of $169 to $381 AUD. The coin was attempting to reach the $500 AUD mark, getting quite close to it before the rally ended, and a correction hit.
Around July 20, the ETH price managed to break out and skyrocket to its next major resistance at $550 AUD. It reached this level just as the first week of August ended, and it kept trying to break it for months, finally succeeding in the early days of November 2020.
Reasons why Ethereum Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this Ethereum Price rally, It could also be due to the ETH 2.0 upgrade.
Chainlink (LINK) is a decentralized oracle network that aims to connect smart contracts with data from the real world. Chainlink was developed by Sergey Nazarov, with Steve Ellis as the other co-founder. It held an ICO in September 2017, raising $32 million, with a total supply of 1 billion LINK tokens. LINK, the cryptocurrency native to the Chainlink decentralized oracle network, is used to pay node operators.
Price Analysis Jan-Dec
ChainLink saw a significant price movement in January 2020 and ended in February. During this period, the coin managed to grow from $2.74 AUD to $5.60 AUD in the short time frame. In March, it crucially fell back to its previous price point of $2.89 AUD. In April, it managed to recover, climbing back to $3.55 AUD. Then on July 7, 2020, the LINK price underwent an impressive surge as China’s national blockchain network, the Blockchain Service Network (BSN) was activated with 135 nodes integrated with Chainlink price oracles.
The news saw the LINK price surge from around $6.87 AUD to an all-time high of $9.60 AUD, with gains of +29% percent on the day. Chainlink continued an ascending trendline into mid-August, gaining bullish momentum. Into late September 2020, it saw sudden bearish activity before beginning its climb once again into October.
At the time of writing, ADA is ranked 9th cryptocurrency globally and the current price is $21.04 AUD. According to CoinmarketCap, the cryptocurrency has now broken into the top 10. Before the end of 2020, Chainlink is most likely to gain more against its AUD/BTC pair and touch around $23.04 AUD.
Reasons why LINK Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this massive rise. And some other several things that have made Chainlink grow into what it is currently. One of the factors that made it rise is the number of products offered. People can get crypto loans, make savings, and even earn interest on their Chainlink coin.
Cardano is a proof-of-stake blockchain platform that says its goal is to allow “changemakers, innovators and visionaries” to bring about positive global change. The open-source project also aims to “redistribute power from unaccountable structures to the margins to individuals” — helping to create a society that is more secure, transparent, and fair.
Price Analysis Jan-Dec
Cardano performed well at the beginning of the year, rising to $0.0927 AUD by 13 February. ADA may have continued to grow, but the entire crypto market has suffered, and Cardano fell as low as $0.0457 AUD by 13 March. After testing all-time lows, the crypto coin’s price rebounded to as high as $0.2543 AUD on 27 July, showing a seven-fold increase in price since the March drop. Currently, Cardano looks bullish, consolidating above the $0.3107 AUD support level and trading at $0.3845 AUD per coin.
The Cardano cryptocurrency looks very promising, so the number of investors willing to invest in ADA is gradually rising. The forthcoming October update of the voting and governance protocol may lead to a price increase.
Reasons why Cardano Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this Ethereum Price rally, It could also be due to this year that has been most significant for the Shelley hard fork 10, beginning Cardano’s transition from a federated blockchain to a decentralized and robust network of independent stake pools. Shelley was also the first time that IOHK’s Hard Fork Combinator 1 was deployed, enabling the seamless transition from Byron to Shelley.
Shelley saw the arrival of staking and delegation, representing the first time that all ada holders could participate in consensus on the network, and earn staking rewards for their contribution.
7. Stellar (XLM) +506%
Stellar is an open network that allows money to be moved and stored. When it was released in July 2014, one of its goals was boosting financial inclusion by reaching the world’s unbanked — but soon afterward, its priorities shifted to helping financial firms connect with one another through blockchain technology. The network’s native token, lumens, serves as a bridge that makes it less expensive to trade assets across borders. All of this aims to challenge existing payment providers, who often charge high fees for a similar service.
Price Analysis Jan-Dec
The positive sentiments of being an efficient blockchain payment network have moved swiftly from XRP to XLM because of Stellar’s recent partnership with the Ukraine government to digitize their national fiat currency. Stellar has upgraded its platform from Protocol 13 to Protocol 15 on November 23rd and the upgrade has improved sponsored reserves and claimable balances on the platform.
With a market cap of $10,728,525,470 AUD and a circulating supply of 20,853,997,348 XLM, Stellar has taken a strong position in the list of top-20 cryptocurrencies, occupying 9th place at the moment of writing. Stellar’s closest rivals are Ethereum, TRON, and Cardano.
By the end of October 2020, the cryptocurrency was trading at around $0.1475 AUD, which is -30% lower than the XLM 52-week high of $0.1785 AUD from August 17, and +192% higher than the 52-week low of $0.0587 AUD from March 12, 2020.
Reasons why XLM Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this price rally and some other factors include on April 11th, 2020, the Stellar Lumens Foundation released its report for Q1 2020, showing excellent ecosystem growth. What’s more, the total usage and transaction volumes had increased in comparison to Q4 of 2019. Interestingly enough, though, the total number of registered Stellar accounts decreased by 1.79% between Q4 2019 and Q1 2020. When you take the 8% increase of trading volume into account, this means that the increased activity was due to existing users. Stellar’s daily operations also managed to increase by an incredible +113% from Q1 2020 to Q3 2020.
VeChain is the world’s leading blockchain platform offering Blockchain-as-a-Service to enterprises for products and information. By leveraging on blockchain technology, VeChain strives to build a trust-free and distributed business ecosystem, which is self-circulating and scalable.
Price Analysis Jan-Dec
VeChain was long considered one of the hottest cryptocurrencies. Since 2015 the project exists, which wants to score, especially with actual applications and partnerships. After positive news and new announcements made the round in the last weeks, it is time for a small VeChain analysis.
The project, therefore, remained under the radar for a long time. From August 2018 to March 2020, short-term successes and newly established partnerships were able to give the coin a slight boost. However, the big break from the negative trend failed to materialize for a long time.
In March of this year came then the break-in with all cryptocurrencies. All the same, whether Bitcoin, Ethereum, or evenly VeChain (VET): High two-digit exchange losses shift the market into a deep red. VET course: Over +400% growth since March 2020. After it came with nearly all cryptocurrencies to substantial corrections, many investors used the opportunity to buy undervalued Coins. The VeChain share price recovered enormously well in the period from March to June. In June, the VET price was around 0.01457 AUD, while in March, it was just 0.0089 AUD.
In the period from June to July, VET rose again. In August this year, VeChain reached an annual and, at the same time, an all-time high with a price of 0.045 AUD.
Reasons why VeChain Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this price rally and also in a press release, the VeChain Foundation has announced its participation in the RMIT Blockchain Innovation Hub. Created by the Royal Melbourne Institute of Technology (RMIT), the initiative is part of an interdisciplinary team of researchers from renowned entities.
9. Bitcoin (BTC) +338%
Bitcoin is a peer-to-peer online currency, meaning that all transactions happen directly between equal, independent network participants, without the need for any intermediary to permit or facilitate them. Bitcoin was created, according to Nakamoto’s own words, to allow “online payments to be sent directly from one party to another without going through a financial institution.”
Price Analysis Jan-Dec
At the start of the year, bitcoin was still considered a fringe investment, disparaged by the likes of the billionaire investor Warren Buffett as having “no value.” By the end of the year, however, bitcoin has nearly quadrupled in value, reaching an all-time high above $46,560.57 AUD and thrusting itself into the center of conversations among big investors and Wall Street firms.
Some bitcoin proponents saw the success of the cryptocurrency and its underlying blockchain network as validation of a landmark technology that might forever change finance.
At the time of writing, BTC is ranked 1st cryptocurrency globally and the current price is $44,736 AUD. Bitcoin started its rally from Jan 2020 with $12,754 AUD price levels and dropped again in March around $8654 AUD.
As May arrived, the Bitcoin network’s upcoming “halving” seemed like an afterthought compared with the steep economic toll of the coronavirus.
As of early October, bitcoin prices were trading around $16,800 AUD, up +50% on the year. It was already an impressive gain, especially during a year when the global economy had suffered its worst contraction since the Great Depression nearly a century early. U.S. stocks were up 4%.
Reasons why Bitcoin Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May was the major reason behind this massive rally in Bitcoin.
Halvings will keep occurring every four years until the supply cap of 21 million bitcoin has been reached,” the analysts wrote. This means we can project well into the future, and have clarity about what Bitcoin’s inflation rate will look like one, five, or 10 years from now.
10. Litecoin (LTC) +261%
Litecoin is a peer-to-peer cryptocurrency created by Charlie Lee, a former Google employee, in 2011. The cryptocurrency was created based on the Bitcoin protocol, but it differs in terms of the hashing algorithm used, hard cap, block transaction times, and a few other factors. Litecoin was released via an open-source client on GitHub on Oct. 7, 2011, and the Litecoin Network went live five days later on Oct. 13, 2011.
Price Analysis Jan-Dec
Although Litecoin has been around since 2011, an ‘official’ Litecoin price history begins in early 2013 when CoinMarketCap went live. Litecoin spiked from a price of around $3 AUD to $40 AUD during the first crypto market bull run in late 2013. After dropping back down to the $3 AUD – $5 AUD range, it hit an all-time high of nearly $550 AUD during the 2017-2018 bull run, a 100x rally.
Litecoin has been moving sideways since the March 2020 flash crash, hovering at a price between $120 AUD to $190 AUD and currently sitting around $206 AUD. Support appears to be around the $130 AUD -$170 AUD range and it appears that the sideways trend will continue. Trading volume for Litecoin has been increasing gradually since December however, which may be indicative of another move to a $250 AUD price.
Currently, Litecoin (LTC) is trading at $206.58 AUD with LTC price +6.03% up today. The market cap of Litecoin is $13,876,355,385 AUD with 66,245,618 LTC circulating currently. The 24-hour price movement chart indicates that $10,774,415,054 worth of LTC was trading.
Reasons Why Litecoin Might Have Gone Up
The recent rise in Bitcoin over +200% since the halving in May and then the suggested start of the Altcoin season could have contributed to this Ethereum Price rally, It could also be due to the Litecoin’s halving – a pre-programmed reduction in the block reward LTC miners receive – caused the LTC price to skyrocket, reaching over +200% returns before it began to correct.
Where to Buy or Trade Altcoins?
These 10 Altcoins have the highest liquidity on Binance Exchange so that would help for trading on USDT or BTC pairs. However, if you’re just looking at buying some quick and hodling then Swyftx Exchange is a popular choice in Australia.
Mark Rodda, a market analyst from Melbourne who runs IG trading, recently addressed JP morgan’s comments on a possible $145,000 (188,000 AUD) price target for Bitcoin.
The investment bank recently called Bitcoin the “digital gold for Millenials” as price reached $35k, marking a new all-time high and possibly reaching $145,000 by the end of 2021, according to their market analysts from Wall Street. But Rodda thinks BTC still has a “few years” to meet that price:
“This price target is one that would be met in the longer-term, over the next few years, rather than something that might occur at some stage in 2021.”
Bitcoin was recently traded as high as $35,737, a 26% gain after falling to $27,700 on January 4. The recent upward rally called the attention of JP Morgan and other institutional analysts, who now think BTC could replace gold as the best store of value, and that the “Bitcoin versus Gold” race has started.
Although Rodda thinks that Bitcoin increased its market cap with a strong bullish sentiment, it doesn’t have to replace gold necessarily, as both assets can become better stores of values against declining fiat and inflation.
2021, a “Great Year” for Cryptocurrencies
Rodda also shared his thoughts on other digital assets, stating that “2021 should be a great year” for cryptocurrencies, after Ethereum, the second currency with the largest market cap made an outstanding upward rally with a 600 % Return Of Investments (ROI).
Byron Goldberg, director of Australia-based crypto company Luno, made similar statements to Rodda’s, adding that institutions are also seeking better stores of value — the reason behind the massive hoard of Bitcoin by the end of 2020, raising concerns about BTC’s liquidity.
“At present, gold has a market cap of roughly US$10 trillion. If 30 per cent of value transfers from gold to Bitcoin over the next few years, the price of a Bitcoin would be worth around US$140,000 – a similar figure to JPMorgan’s price target, which is 300 per cent away from here”
It appears that 2021 could be the year where cryptocurrencies could take a broader audience, thanks to the massive bullish sentiment they had in 2020. On top of that, the director of Binance Australia stated that cryptocurrencies could play a major role in digital economies:
We can confidently say that the increased positive sentiment over the past 12 months from the retail and institutional crowd will not disappear anytime soon. I believe a post-pandemic world will see digital economies mature across many industries, which could garner support to push digital assets to a new level of adoption.”
stated Jeff Yew, CEO of Binance Australia for News.com.au
The overall cryptocurrency market capitalization has reached one trillion US dollars for the first time in history, according to data from the leading crypto statistics site Coinmarketcap.com.
Major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have seen exponential gains over the past few months, both rising by over 300% since November. Some smaller cap crypto assets and digital tokens like Chainlink (LINK), Cardano (ADA), and Polkadot (DOT) have enjoyed similar price rallies.
Bitcoin’s market valuation recently catapulted to $650 billion, overtaking major US investment firm Berkshire Hathaway, with a $533 billion market cap. Berkshire Hathaway was acquired and reformed in the 70s by iconic investor Warren Buffet, who remains its chairman and CEO to this day. Buffett has historically been very vocal about his dislike of cryptocurrencies, once famously calling Bitcoin “rat poison squared”.
Despite Bitcoin being the best performing asset of the past decade by a large degree, Buffett continues to discount its worth, insisting that it has no value and is purely speculative. However, several major tech firms and financial institutions disagree, such as 170-year-old Mass Mutual which recently bought up $100 million worth of Bitcoin. A small amount compared to the world’s largest digital currency asset manager, Grayscale, with over $20 billion invested in crypto assets.
Image from Howmuch.net
Criticism
Naturally, the extreme gains mean the cryptocurrency market has once again come under fire from critics who believe that asset prices are being manipulated. As with the previous 2017 rally, many critics believe that USDT tokens printed by stablecoin company Tether are being used to artificially prop up the cryptocurrency market – much like the US Federal Reserve props up traditional stock markets with seemingly endless USD issuance.
The concerns are not without merit, especially considering Tether’s continued reluctance to prove that it’s USDT tokens are fully backed by genuine dollar reserves. Tether has been minting millions of dollars in USDT tokens lately, presumably to meet the demand of consumers cashing out their Bitcoin profits or buying USDT as a digital onramp to the crypto world. Without clear and transparent auditing of this issuance, it’s fair to say the situation has the potential for abuse and manipulation.
One argument that challenges this theory is PlanB’s Bitcoin stock-to-flow model, which has accurately tracked the price movements of the BTC/USD trading pair over several years. The model reveals how the price of Bitcoin closely follows a set pattern dictated not by buyers or sellers but rather scarcity created by the algorithm which halves the BTC mining reward every 210,000 blocks. Price movements from the very first Bitcoin halving in late 2012 – long before Tether started printing in 2015 – correlate with Plan B’s stock-to-flow model. This suggests that the current price rally and the one following the previous 2016 halving are simply a result of Bitcoin’s coding rather than any external manipulation.
Despite the majority of news focusing on market leader Bitcoin, Ethereum had a much better year than the king of crypto, providing a 600% return-on-investment (ROI) during 2020.
After a massive week-long rally that saw Ethereum double in price and break through the significant $1,000 price point, Australian market analyst Kyle Rodda told news.com.au that “2021 should be a good year” for the cryptocurrency.
However, the sudden gains faced severe resistance around the US$1,200 mark, getting knocked back down to US$892 before recovering to current levels. ETH is now back up above $1,100, with Bitcoin up 16% after suffering 13% losses and dumping almost US$4,000 in one hour on Monday.
The movements could indicate the start of the ever-elusive alt-season that crypto altcoin investors have been patiently waiting for since the current bull market started last year. As popular Crypto Twitter voice GalaxyBTC pointed out:
“This $BTC correction was all we needed to finally ignite the #altseason.”
As a result of the huge gains, Ethereum gas fees are skyrocketing again, rendering the network inefficient for the massive decentralized finance (DeFi) market that relies largely on Ethereum’s ERC20 protocol to function.
Happy Birthday Bitcoin!
The cryptocurrency market has been on a tear recently, with leading asset Bitcoin (BTC) smashing records and hitting new highs almost daily. The price movements mimic the 2017 rally that saw Bitcoin rise from a new all-time high (ATH) of around $1,000 to almost $20,000 per coin in less than a year. Should the same scenario play out this time around, Bitcoin could reach $400,000 per coin before the end of 2021.
Yesterday, on January 3, 2021, Bitcoin celebrated its 12th birthday with huge gains that took it to a new ATH above AUD$40,000. The mysterious and pseudonymous creator, Satoshi Nakamoto, mined the very first Bitcoin block (the genesis block) on January 3, 2009, forever encoding in history a news headline from the day: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”
Many believe the meaning of the encoded headline is to reiterate Bitcoin’s intention as an autonomous and incorruptible replacement for badly managed government-issued money.
Institutional investment continues aggressively
Speaking to Forbes yesterday, US-based blockchain developer James Reilly from decentralized hosting platform Ether-1 said “BTC is becoming more mainstream.” The level of institutional interest today is much larger than during the 2017 rally, when cryptocurrencies were largely considered a risky, unreliable investment.
With multinational investment firms like Grayscale and tech giants Paypal pouring money and research into the crypto market, this new rally could unfold in a unique fashion. While adoption and investment are typically a positive sign for an asset class, in the case of cryptocurrency, it’s also attracted intense regulatory scrutiny. The two opposing forces of regulation and adoption will need to find a suitable balance if the crypto market hopes to mature in a sustainable way.
These are the coins i really like the look of in 2021. This is not financial or trading advice, I’m just sharing some information and thoughts on these projects that look interesting this year.
1. Bitcoin (BTC)
Bitcoin is the first successful internet money based on peer-to-peer technology; whereby no central bank or authority is involved in the transaction and production of the Bitcoin currency.
The Price of BTC in 2020 went from US $7,000 to now $33,000 – Source: Coinmarketcap.com
The end of 2020 saw the start of the institutional money flowing into BTC with the Bitcoin marketcap rising from US $130 Billion to over US $500 Billion. With big players such as Paypal, Square Inc, MicroStrategy Inc and other institutions adding thousands of BTC to their holdings.
Ethereum is a decentralized open-source blockchain system that features its own cryptocurrency, Ether. ETH works as a platform for numerous other cryptocurrencies, as well as for the execution of decentralized smart contracts.
The Price of ETH in 2020 went from US $129 to now $1,090 – Source: Coinmarketcap.com
The recent developments of the ETH launchpad and Ethereum 2.0has certainly sparked the interest in Ethereum.
In 2020 we also saw the emergence of DeFi and it’s marketcap surpassing US $10 Billion which looks like a very interesting market with lots of exciting developments for 2021.
3. Chainlink (LINK)
Chainlink is a decentralized oracle network which aims to connect smart contracts with data from the real world.
The Price of LINK in 2020 went from US $2 to now $14 – Source: Coinmarketcap.com
Chainlink provides is the missing link (pun intended) between the real world data and the virtual blockchain data. The smart contracts provided by other blockchains such as Ethereum will require real world data to execute. This is where Chainlink comes in to provide verifiable data to those networks through real world APIs.
Looking to 2021 as Chainlink continues to add to its growing number of partnerships and more blockchains to start to use its services and DeFi projects to use Chainlink’s decentralized oracle network.
4. Stellar (XLM)
Stellar is an open network that allows money to be moved and stored. When it was released in July 2014, one of its goals was boosting financial inclusion by reaching the world’s unbanked — but soon afterwards, its priorities shifted to helping financial firms connect with one another through blockchain technology.
The Price of XLM in 2020 went from US $0.04 to now $0.19 – Source: Coinmarketcap.com
Stellar was founded in the USA where some of the Ripple founders left and cloned the codebase and rewrote it. I’m quite impressed with the coding activity of Stellar seen on Github which if it continues, they should have a great 2021. Also looking forward to seeing what the partnership with IBM and blockchain cross-border payments can produce and possible banks launching stablecoins on the network.
5. OMG Network (OMG)
OMG Network, formerly known as OmiseGo, is a non-custodial, layer-2 scaling solution built for the Ethereum blockchain. As an Ethereum scaling solution, OMG Network is designed to allow users to transfer ETH and ERC20 tokens significantly faster and cheaper than when transacting directly on the Ethereum network.
The Price of OMG in 2020 went from US $0.6 to now $3.30 – Source: Coinmarketcap.com
Founded in Thailand in 2017, OMG is covering areas such as payments, loyalty points and banking/finance.
2021 could see OMG switch to Proof of Stake (POS) and working with ETH to scale transactions lowering transaction fees through the Plasma Network.
Closing Remarks
Obviously there are thousands of cryptos and projects that are trying to solve complex problems and improve all areas of our industries. The cryptocurrencies and tokens are starting to enter mainstream news now and i’m sure 2021 will see a lot more exposure for these awesome projects.
The Price of BTC in 2020 went from US $7,000 to now $33,000 The Price of ETH in 2020 went from US $129 to now $1,090 The Price of LINK in 2020 went from US $2 to now $14 The Price of XLM in 2020 went from US $0.04 to now $0.19 The Price of OMG in 2020 went from US $0.6 to now $3.30
I wonder how these will perform in 2021… Check back next year for an update!
After Bitcoin (BTC) crossed the US$20,000 level in December, the leading cryptocurrency has been notably topping its value to the latest all-time high (ATH) above US$34,000. Despite the exponential growth since the past months, many opponents like Nouriel Roubini still don’t see the cryptocurrency as a thing. Popularly known as Dr. Doom, Roubini again referred to Bitcoin’s growth as a “bubble,” which is largely manipulated by Tether’s massive USDT minting.
Dr Doom Red-flags Bitcoin’s Growth
On Sunday, the price of Bitcoin briefly dropped by more than 15 percent. This movement alone saw the cryptocurrency declined from as high as US$34,000 to US$29,000, sparking sentiment that BTC’s bullish moment is finally over. Surprisingly, the price of the crypto rebounded to a little above US$30,000. This suggested that many investors and traders are still optimistic about BTC at US$30K.
For Dr. Doom, however, the price movement of Bitcoin was manipulated. He argued that the digital currency could only rebound because Tether resumed massive issuance. “Active manipulation of BTC started after those scammers woke up from their Sunday night sleep,” Roubini tweeted, adding that the whole BTC story will end in sorrow when the “law enforcement & reg authorities crack it down soon.”
Bitcoin tumbles by over 15% from 34K to 29K in 24 hours on a Sunday without any news. This is a total irrational bubble on a pseudo asset with zero intrinsic or fundamental value that is totally manipulated via fiat Tether daily issuance, massive pump & dump schemes and whales.
While Dr. Doom thinks that Bitcoin’s quick rebound follows the massive USDT issuance, many industry players think otherwise. For the crypto veteran trader Scott Melker (The Wolf Of All Streets), the BTC rebound shows there’s an insane demand for the cryptocurrency. A popular crypto analyst Willy Woo also opined that Bitcoin would hardly drop to US$20,000 again.
“We’ll never see $20k BTC again. $24k support would need a black swan event to breakdown. Floor price supported by long term buyers is rising very fast,” Willy Woo wrote on Sunday.
Recently, Grayscale released its total Assets Under Management (AUD), with a total of $20B worth of Bitcoin, surpassing the total amount of BTC mined throughout 2020.
With more details, Grayscale amassed a total of 72,950 BTC, almost 3X mined last year, according to Coin98 Analytics:
The recent data heated the topic in the crypto community on how financial institutions are squeezing the Bitcoin supply. Credit card companies like PayPal and Visa embraced cryptocurrencies noticing the increasing general demand for better stores of value. But BTC has a limited supply, a key aspect of this scenario.
Net assets under management of Grayscale. Source: Twitter
Not surprisingly, when institutions decided to hoard Bitcoin, the bull run escalated, and BTC and crypto were achieving a broader space on social networks. However, this recent massive accumulation of BTC has raised concerns about it.
How Much BTC Is Left For Retail Traders Then?
According to data from Glassnode, Bitcoin is on a stage where the illiquid supply is greater than the liquid supply, which is what is driving the current bull run on BTC. Out of the total 70 % Bitcoin supply, only 20% is available for trading on exchanges. Likewise, another reason behind the current decrease is the shortage of ASIC miners.
Our analysis shows that currently 78% of the circulating Bitcoin supply (14.5 million BTC) can be classified as being illiquid. A trend that has been increasing over the course of 2020 and paints a potential bullish picture for Bitcoin in the upcoming months, as less BTC are available in the network to be bought.
The massive adoption of crypto by institutions sets the bullish scenario, as miners are producing and selling less – plus the lost BTCs and the holders make the BTC supply small, driving the price up.
Another topic discussed in crypto forums is —ironically— a possible fully centralized scenario for Bitcoin, as institutions hoard massive amounts of BTC, drying the supply and changing the original decentralized concept.
Apart from its volatility, one other known problem when using cryptocurrency for payments is that the blockchain network fees can vary largely from day to day.
To help diagnose the fees we transferred $100 AUD to BTC, LTC, ETH and USDC and sent them to an external wallet to see the fees charged by the exchange platform and the blockchain network fees. Note: all fees shown as at 31/12/2020and sent using CoinJar to an external walleton chain.
AUD to BTC to External BTC Address
$100 AUD (CoinJar cash account)
Converted to 0.00262679 BTC (A$98.96). 1% conversion fee.
Sent to an external BTC address
Received 0.00220921 BTC (A$82.90)
Network fee: 0.00041758 BTC (A$15.67)
Total fees: A$17.10 (17.1%)
AUD to LTC to to External LTC Address
$100 AUD (CoinJar cash account)
Converted to 0.6 LTC ($98.96). 1% conversion fee.
Sent to an external LTC address
Received 0.6 LTC (A$98.96)
Network fee 0.00000373 LTC (A$0.00062)
Total fees: A$1.04 (1.04%)
AUD to ETH to to External ETH Address
$100 AUD (CoinJar cash account)
Converted to 0.1 ETH (A$98.96). 1% conversion fee.
Sent to an external ETH address.
Received 0.09131 ETH (A$89.53).
Network fee: 0.00869 ETH (A$9.43)
Total fees: A$10.47 (10.47%)
AUD to USDC to External USDC Address
$100 AUD (CoinJar cash account)
Converted to 75.63 USDC (A$98.96). 1% conversion fee.
Sent to an external USDC address.
Received 70 USDC (A$92.00)
Network fee: 4.928023 USDC (A$6.42)
Total fees: A$8.00 (8%)
Conclusion
Here is a comparison of network fees for each crypto we tested (when sending approximately A$100 worth).
Coin
Approximate Network Fee
BTC
15.83%
LTC
0.0001%
ETH
9.53%
USDC
6.49%
Comparison of network fees for cryptocurrencies
Litecoin (LTC) has by far the cheapest fees (almost non-existent) compared to BTC, ETH and USDC. As we know, the BTC network fee doesn’t vary based on the amount, but rather on the network conditions at the time of transfer. Therefore, sending larger amounts would make the fees more easily acceptable.
As crypto analysts expect that institutions will make massive investments in Bitcoin (BTC) in the coming years, many publicly-listed companies are already confirming these sentiments in 2020. Recently, the likes of MassMutual, an insurance company, invested about US$100 million in the cryptocurrency. Also, MicroStrategy completed its Bitcoin investment to US$1 billion in recent days.
Today, a popular Canadian financial technology company, Mogo, has disclosed its plans to invest more than US$1 million in Bitcoin.
The Institutions are Here!
The Nasdaq-listed company said on Wednesday that it’s planning to buy US$1.16 million worth of Bitcoin as corporate investment. With such capital, the company will be able to get about 47.1 Bitcoin, following the current price of the crypto at US$23,579 on Coinmarketcap.
Meanwhile, Mogo further revealed plans to buy additional Bitcoin in the coming year. Judging by this, one can easily predict that the company may invest in the cryptocurrency at any time soon.
The Bitcoin will be purchased from the company’s US$13.2 million investment portfolio. “We are strong believers in bitcoin as an asset class and believe this investment is consistent with our goal to make bitcoin investing available to all Canadians,” according to the president and CFO of Mogo, Greg Feller.
It’s also worth mentioning that other prominent companies like Square, Galaxy Digital, etc., are holding some Bitcoin as corporate investment.
Bitcoin Adoptions Grows With Price Performance
Since the leading cryptocurrency broke the US$20,000 level, there has been a massive interest in it among institutional and retail investors. This is evident following the growing number of BTC addresses. Also, the institutional-grade investment companies, especially Grayscale, have been recording incredible growth in its assets under management (AUM).
Despite that Grayscale stopped accepting funds from new investors on its crypto products, it still bought over 12,000 BTC today, which came from its existing client alone. Currently, the company’s AUM is worth $15.9 billion.
12/22/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
