Bitcoin and Ethereum trend forecast for 2021 according to Crypto.com analysis

Crypto.com has reviewed the cryptocurrency highlights of 2020 in its annual market review. Most interesting is what the Bitcoin and Ethereum forecast is for this year.

The report also makes some predictions regarding cryptocurrency trends in 2021, most interestingly what conclusion the analysis came to regarding the development of leading cryptocurrencies Bitcoin Billionaire and Ethereum.

Bitcoin is still in the midst of growth

According to Crypto.com’s annual report, the cryptocurrency market is still in its infancy. It was noted that there are only about 73 million crypto users worldwide. This represents just 1% of the world’s population.

World map for crypto adoption in early 2021.

Although Bitcoin and the entire crypto market has grown rapidly, reaching $1 trillion in capitalization last year, the size of the market is still tiny compared to traditional financial markets. For example, pension fund assets in 37 OECD countries alone total $32 trillion, dwarfing the total market capitalization of cryptocurrencies.

The report suggests that investors should expect continued inflows from new market entrants and institutional investors. One of the strongest indicators of rising institutional adoption in 2021 will be the growth of Bitcoin’s options market, which should appeal to traditional finance. For example, at the end of December 2020, Bitcoin options open interest already reached a whopping $6.2 billion.

Aggregate open interest in bitcoin options

Ethereum and DeFi Forecast

Crypto.com also analyzed Ethereum in more detail. The company’s report predicts that the growth of decentralized finance (DeFi) will continue in 2021. Moreover, the company expects DeFi projects that are easy to invest in, such as aggregators and decentralized asset managers, to gain popularity.

Graph on the development of assets in DeFi

On the negative side, the report highlights the fact that Ethereum is „in dire need of scalability improvement.“ Layer 2 solutions such as Plasma, Sidechains, ZK rollups, and Optimistic rollups are already underway. Nonetheless, the company predicts that some applications will migrate to competing blockchains for greater efficiency.

Crypto.com additionally noted that Ethereum should also see a continued upswing in non-fungible token (NFT) trading. Specifically, with digital artwork and crypto collectibles.