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Will There Be a Christmas 2020 Miracle for Bitcoin and Ethereum?

There is much to anticipate in the last month of 2020, a year which will inevitably go down in history as one of humanity’s most devastating years, in terms of lives lost to a widespread pandemic, political uncertainty, economic degradation, environmental losses and more. It is also one for the books for the crypto market, as 2020 marks the year Bitcoin came just $200 shy of hitting its $20,000 historical all-time-high (ATH).

The crypto community was abuzz with anticipation as Bitcoin hit another ATH last night past $19.800. After three years of extreme volatility with Bitcoin but the asset showing no signs of being able to surpass its historical 2017 high, it is in 2020 that Bitcoin bounced back, and much stronger than anyone else had expected. Bitcoin prices have since retraced to $19,500, but most analysts agree that Bitcoin’s bull run is far from over.

The perennial question is if Bitcoin can indeed successfully test the $20,000 mark before the year ends as the orange coin steps forth into the new year with new milestones to create. This year, the Bitcoin market has seen an influx of new market entrants who have been sold on the idea of Bitcoin as a wealth-creation asset especially in times of crisis. The timing is spot on, because 2020 has been nothing but riddled with crisis in one form after another.

Two types of investors dominate the market at present, firstly, the early adopters, and secondly, new and old institutional players who are buying Bitcoin up in bulk. According to Bloomberg, some 2% of wallet addresses hold about 95% of the current Bitcoin supply, and with both whales and other institutional investors splitting up a piece of the limited pie, Bitcoin prices have experienced continuous surges in the past few months.

It is true that when Bitcoin inadvertently drops, it drops substantially, but it always recovers big, sooner or later.

Second only to Bitcoin is Ethereum, who has performed remarkably well this year, buoyed also by the immense growth of DeFi projects and also, the hype over Ethereum 2.0, the long-awaited upgrade the crypto community has been waiting for since years ago. The Phase 0 beacon chain launch is finally within grasp, and in the past few weeks, Ethereum has soared over $600. It currently trades at $610 at the time of writing, and just like Bitcoin which was stuck at under $10,000 for a prolonged period of time earlier in the year, it is almost hard to fathom that Ethereum traded only at around the $200 mark only ten months ago. That’s a solid 200% gain.

As Ethereum 2.0 sees first light in the next few hours, it is difficult to say if Ethereum prices will be driven higher before January 2021, but nothing much on the Ethereum 2.0 potential validators’ ends can be done even after Phase 0 officially commences. No smart contracts can be built on it yet, as Phase 0 simply enables the staking function. However, major leading exchanges have already announced their support for Ethereum 2.0, such as Coinbase and Binance.

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© Copyright of Novum Global Consultancy Pte Ltd {2020, 2021}. All rights reserved.

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