Happy New Year! Welcome to another exciting year in trading. You’re kicking it off in the best possible place with our first weekly trading preview of 2021. Go you! Today, we’re looking at the Crypto market, where’s it going and which assets you should be watching? Read on to find out. We’ll also let you know what key events to look out for this week.
2020 was a good year for Crypto
Understatement of the decade. Let’s get this out of the way early on. Generally speaking, last year was a ridiculously impressive one for Crypto investors, with many in the industry labelling it as the year that the market came of age. The total Crypto market capitalisation for rose by a heady 322% throughout the year. Wowza!
Total market cap 02.01.2020: $193,479,888,768
Total market cap 02.01.2021: $816,602,325,996
Percentage difference: + 322%
Crypto Total Market Capitalisation, 02.01.2020–02.01.2021
What does 2021 hold for Crypto?
Here are a few potential highlights.
1. Increased consumer adoption
This is already accelerating at an incredible rate, as can be seen from the chart above. In 2021, we will likely see more payment providers jumping on-board, offering clients to make/receive payments in crypto, as PayPal did last year with bitcoin.
2. Increased institutional investment
Cryptos like bitcoin (BTC) had a big boost in this form of investment in 2020. For example, tech firm MicroStrategy, who have a total of more than $1.5 billion on its books tied to the crypto. Square is another company that has held tens of millions of dollars of bitcoin on its balance sheet. There’s a good chance that more companies will follow suit in 2021, and at a faster rate. If so, investors could see hefty price rises.
3. More focus on regulation
Increased consumer and institutional adoption will bring more questions from regulatory authorities. In December, it was reported that new US regulations for bitcoin and other cryptocurrencies are being developed and will roll out early in the new year. This will offer protection for existing investors, but also peace of mind to potentially huge amounts of retail and institutional investors who have been waiting for more controls and safety nets.
4. All eyes on Biden
Linked to the above, in the US, a lot is riding on the stance that the new government will take on crypto. The scrutiny may focus on fundamental, existential questions, such as whether a particular crypto is a currency or an asset, whether either can be traded and by whom, and how much tax investors and exchanges may have to fork out. The currency/asset dynamic has been a central issue in the Securities and Exchange Commission’s recent lawsuit against Ripple over XRP.
Which cryptos might be hot?
Note: the following is not to be considered as investment advice. Please make your own decision when choosing which assets to invest in, or not. You’re the boss! Besides the obvious (Bitcoin and Ethereum), here are some potentially interesting cryptos to monitor in 2021.
A really cool concept, Chainlink is a practical solution to the infrastructural challenge of mainstream blockchain adoption. Put simply, Chainlink aims to serve as the connection platform between real world problems and blockchain applications. A whopping 560% increase in price over the course of last year shows that this is a well-backed horse. With more and more blockchain use cases popping up, could Chainlink really take off this year?
Looking back on 2020, few projects managed to evolve as much as Cardano. The third-generation blockchain, and Ethereum rival, is slowly breaking into the mainstream. IOHK, the company that develops Cardano and it’s token, ADA, has an ambitious roadmap for 2021. If it successfully delivers, ADA’s price may dramatically rise.
Basic Attention Token (BAT)
BAT is the favourite coin of content writers, web developers, and marketers. BAT is a blockchain-based system for tracking media consumers’ time and attention on websites using the Brave web browser. It justly rewards content creators for their efforts based on the attention their content receives from surfers. With development still ongoing and with a strong community behind it, BAT could primed for a big boost in 2021.
The first alt-coin, Litecoin has long languished in the shadow of BTC. As the crypto market fleshed itself out, LTC shed some of its dominant presence. However, 2020 offered a path back for Litecoin and it still appears to be a viable option for many investors, judging by that 113% price jump throughout the course of the year.
Some quick Crypto investment tips
If you’re thinking of investing in Crypto, the same rules as any investment apply, read from good unbiased sources! In terms of these particular assets, pay close attention to use cases. If the crypto token has a clear use, the chances of it being used are higher, which may increase your return on investment.
One other bit of advice — Crypto assets are highly volatile. Only invest what you are willing to lose. Remember, what goes up might also come down twice as fast.
What’s on the trading agenda this week?
Here’s everything you need to keep track of this week.
Monday 4th January
● USD — Markit Manufacturing PMI Final (DEC)
Tuesday 5th January
● USD — ISM Manufacturing PMI (DEC)
Wednesday 6th January
● USD — FOMC Minutes
Thursday 7th January
● EUR — Core Inflation Rate YoY Flash (DEC)
● CAD — Balance of Trade (NOV)
Friday 8th January
● CAD — Employment Change (DEC) + Unemployment Rate (DEC)
● USD — Non Farm Payrolls (DEC) + Unemployment Rate (DEC)
Here at Contentworks we closely follow market movements and prep content that we think your traders would love to read. Let’s get you started right here.
The Contentworks team