2021 market outlook.

cryptocurrency 11-20

○Looking back on 2020 Bitcoin.

January
・ Bitcoin options trading started on the Chicago Futures Market (CME) in the United States.
・ Bitcoin payment service company BitPay CCO Sony Thing predicts that Bitcoin will recover $ 20,000 by the end of the year due to an unexpected event.

February
・ Bitcoin exceeded $ 10,000.
・ Bitcoin will start to fall due to the influence of the new coronavirus.

March
・ Bitcoin has dropped sharply to about 450,000 yen due to the pandemic of the new coronavirus.
・ With the resumption of quantitative easing by the Fed, concerns about inflation have begun to be talked about, and Bitcoin is on a recovery trend.

April
・ Cryptocurrency exchange Binance acquires benchmark site CoinMarketCap.
・ Bitcoin continued to recover and exceeded 1 million yen.

May
・ Enforcement of the revised Funds Settlement Law. The name has changed from “virtual currency” to “cryptographic assets”.
・ Bitcoin passes the third half-life once every four years and stabilizes at around 1 million yen.

June
・ An improved version of the Bitcoin price forecast model (S2F) is expected to be $ 288,000 (about 30 million yen) by 2024.
・ The price of Bitcoin was pushed a little by selling, and it took a break at around 1 million yen.

July
・ The Bank of Japan announced “Technical issues for the Central Bank Digital Currency (CBDC) to have the same function as cash”.
・ Bitcoin rose with gold against the backdrop of distrust of legal tender and exceeded $ 11,000.

August
・ The Japan Cryptocurrency Trading Association and the Japan Cryptocurrency Business Association have published the “Request for 2021 Tax Reform”.
・ The price of Bitcoin has been rising since the beginning of the month and has exceeded $13000.

September
・ The correlation between Bitcoin and gold will rise to a record high. After that, the price movements of both are reversed.
・ The price of Bitcoin fell back to the $10,000  level and remained slightly sluggish.

October
・ PayPal’s entry into cryptocurrency service has been well received, and Bitcoin has skyrocketed.
・ After that, it will continue to rise and Bitcoin will reach about $15,000.

November
・ While the price continues to skyrocket, Bitcoin plunges due to the US authorities’ observations of tightening regulations.
・ Although the price of Bitcoin fluctuates, the upward trend continues and exceeds $20,000.

December
・ Demand continues to increase and soars due to the large-scale purchase of Bitcoin by companies such as PayPal.
・ The price of Bitcoin reached a record high of $24,000.

○Comparison with NY Dow.

It is a comparison chart of NY Dow and Bitcoin with the beginning of the year as 100. It can be seen that Bitcoin has been stronger than the NY Dow since the beginning of the year, but at the time of the crash due to the corona shock, it has fallen below the NY Dow. There is a glimpse of Bitcoin’s high volatility, but the level of decline since the beginning of the year was about the same as the NY Dow.

After that, Bitcoin turned to an upward trend before the bottom price of NY Dow, and the flow of “from legal tender insecurity and inflation concerns to Bitcoin” will continue. And since the PayPal news in October, the gap has widened further.

○Comparison with US dollar.

It is a comparison chart of US dollar and Bitcoin with the beginning of the year as 100. The dollar was strong in the first half of the year and weakened in the second half. In the first place, the volatility is not large even in the corona virus. Compared to the beginning of the year, the dollar is about -5% and Bitcoin is about + 300%. The intensity of price movements is too different between legal tender and crypto assets (virtual currency).

○Comparison with gold.

It is a comparison chart of gold and Bitcoin with the beginning of the year as 100. You can see that gold is somewhat closer to Bitcoin than stocks and exchanges. Due to its high rarity, it has also attracted attention as an inflation hedge. But that was until autumn. After the news of PayPal’s entry in October, the movement has clearly changed, rather it seems that gold is being sold and Bitcoin is being bought. It seems that this difference was made by the rapid expansion of demand due to the gathering of purchases by companies and institutional investors in Bitcoin, which is not only rare but also in short supply.

○2021 market outlook.

From now on, I would like to think about Bitcoin in 2021. First of all, the major points that attract worldwide attention are as follows.

New President of Biden, USA
New coronavirus / vaccine
Monetary easing policy trends
Fiscal spending trends
G7 summit
Tokyo Olympics
German general election
After all, it is the situation of the new coronavirus. Depending on this, the movement of the world and the movement of money will change. If the spread of vaccines can restore the traditional life, it is possible that the monetary easing policy will end, which may significantly change the financial market. It is quite possible that the market will go down as society returns.

○What is the environment surrounding Bitcoin?

Next, let’s take a look at the main topics related to Bitcoin and crypto assets (cryptocurrencies).

Central Bank Digital Currency (CBDC)
Digital RMB (People’s Bank of China)
Digital Euro concept
Digital currency forum
Facebook “Diem (Libra)”
Bitcoin ETF
Ethereum futures
Tightening regulations
Service following PayPal.

Next year, the topic of digital assets other than Bitcoin is likely to increase. What impact do these have on Bitcoin? It’s an unpredictable place.

A negative topic for the Bitcoin market is “tightening regulations” on Bitcoin and crypto assets. The tightening of regulations had an impact even when the Bitcoin boom rebounded from the past, and I would like to consider the possibility of pouring water into the rising market.

The positive news is the expansion of services that utilize crypto assets such as PayPal. The emergence of new services may have a positive impact on Bitcoin, both directly and indirectly.

○2021 Bitcoin Market Outlook.

Now, let’s take a look at Bitcoin’s 2021 market outlook. Basically, in the current situation where the monetary easing policy in the corona era continues, it is expected that the financial market as a whole will remain positive. On the other hand, with the spread of vaccines, the path to the former normal society will begin to appear, and the trend toward shrinking monetary easing policies will begin to appear, and the financial market will have some negative aspects. This is an important point, not just for Bitcoin, so keep an eye on it.

On that premise. For example, it was reported that One River Digital, a management company specializing in crypto asset investment operated by US investment company One River Asset Management, plans to invest $ 1 billion (about 103.5 billion yen) in Bitcoin and Ethereum by the end of 2021. There is a possibility that the inflow of funds from companies and funds will continue as in this year.

Behind this is the fact that Bitcoin is not marked to market and does not need to record unrealized profit under US accounting standards, so even if it is held in large quantities, it will not affect accounting and it will be easy for companies to hold it. Therefore, it is expected that corporate purchases will continue in 2021 due to inflation hedging, net investment, and use in settlement services.

○2021 Bitcoin high and low med.

Given this, it is highly likely that 2021 will continue to hit record highs. An improved version of the Bitcoin stock to flow model is expected to be $ 288,000 by 2024, but this year’s rate of increase is about three times that of a considerable rate of increase. Therefore, it is safe to say that the growth rate will slow down a little next year, including adjustments. With that in mind, I think that about twice as much as it is now, around 5 million yen, will be one meditation, but what do you think?

On the contrary, it is undeniable that there is a possibility that it will fall sharply due to changes in the social and financial environment and changes in the environment surrounding crypto assets. In that case, the level that was calm before the sharp rise this year, such as 1 million yen or 10,000 dollars, may be a guide.

Basically, you can think that Bitcoin is still promising, but since it is so volatile, please consider the investment amount and investment policy, fully assuming that it will fall sharply.

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