2021: The Year of Mass Adoption?
Well, it’s been quite a year, hasn’t it? Especially in the crypto universe. Think about where you were in the first few weeks of 2020 – maybe you were hopeful, just hopeful that the price of Bitcoin would reach $10,000 USD once again. And look at it now: breaking $16,000! And what about you DeFi (Decentralized Finance) fans: did you ever think that Dai (DAI) would realize a $1 Billion USD market cap.
No doubt, crypto is having a moment. And pundits are already weighing in on what will happen in 2021. Will this be the year that mass adoption of digital currencies finally arrives? Let’s take a look at where we’ve been in 2020 and what’s propelling crypto toward the holy grail in the digital coin universe: mass adoption.
First, let’s look at the network’s flagship coin BTC. It started the year around $7,000USD and was heading up when the US market crashed on Black Thursday in March. As the Dow Jones Industrial Average (DIA) plummeted nearly 6,4000 points in four days, BTC followed, sliding more than 40% to the year’s low of $5,000 and creating a flurry of worry among coin holders.
“The wild moves come as stock gauges globally slide into bear markets and credit cracks on fears the spreading virus will cause a significant economic downturn,” Bloomberg reported. “The retreat threatens to undermine the argument from many of its advocates that Bitcoin can be a haven in times of turmoil.”
Despite the gloom and doom mood of the traditional markets, crypto fans stood firm.
“I'm 7+ years into my digital currency journey," Michael Sonnenshein, the managing director at Grayscale, which manages the Greyscale Bitcoin Trust, said to Cointelegraph. “Years ago, I'd wake up in the middle of the night to check prices or allow my stomach to churn when the market dropped precipitously, but I never once lost faith in what this incredible community has built. Stay strong. HODL on.”
That optimism continued in the crypto market after a Bitcoin having in May. From that point on, the coin’s only direction was up, way up. “BTC is up 125% year-to-date, over 300% since its March low and 40% in the last 24 days,” @cryptowat_ch tweeted this week.
So, what’s driving this optimism and interest in Bitcoin and digital coins in the mainstream market? A recent JP Morgan report points to institutional investors and the corporate endorsement of the coin by retail organizations including PayPal and Square. That sentiment is echoed across the crypto spectrum.
“Bitcoin stands to gain substantially in 2021 due to further institutionalization of the space, as more custodial services and insurance offerings become available,” said Nick Cote, the Senior Analyst at crypto-trading platform Hxro Labs, to Cyrptonews.com. “Adoption can be reflected not only by price trending up, but also in the amount of unique wallet addresses, total dollar value transacted on-chain, and further global penetration of Bitcoin's brand, which continues to benefit from its first-mover advantage.”
But Bitcoin’s banner performance isn’t the only driver in the race to mass adoption. DeFi moved off the slow burner and caught fire this year. The total value locked now exceeds $11 billion, which is a 1,550% increase year to date, according to CoinTelegraph.
While the US-based Forrester Research cautions that DeFi’s current “Wild West” profile may drive new investors away, others disagree as significant financial services projects launched this year. While Ethereum struggled to keep up with network demand, dai (Dai), Uniswap (UNI) and other tokens are seeing dramatic increases in market cap. Will DeFi be the tipping point in mass adoption?
“…in order for stablecoins to truly achieve mass adoption, they need to appeal to a wider audience, including those that have never used cryptocurrencies before and those simply looking for a safe haven asset during times of crypto market volatility,” Thomas Delahuntly predicted in newsbtc.com.
So will 2021 be the year of mass adoption? While there really isn’t any one central authority in this decentralized universe, no one can really make that call. But clearly, the lights have been shining on crypto in 2020. Mass adoption may be on its way, but it may look a bit different than what Satoshi Nakomoto envisioned.
“As the conversation around blockchain and cryptoassets continue to be had at virtually every level in the private and public sector, broader adoption is all but assured,” writes Sean Stein Smith on forbes.com. “Crypto enthusiasts may see the widespread adoption that has been so desired for years, but it might not take the form of decentralized and distributed options such as bitcoin.”
We shall see, Sean, we shall see.
Joyce Pavia Hanson