2021 – The year of DLT and Bitcoin breakthrough?

Bitcoin raises again -Deadly signs on DeFi and Ethereum 2.0 out of the box

What’s up in 2021?

Starting in 2018 predicting a price of $30,000 per Bitcoin made people smile and no one believed. Bitcoin has poisoned by ICO’s failed investments and the crash of the crypto market at all. We have seen Future Contract markets coming up and was clear we will have a strong time of keeping Bitcoin up if traders take over the markets on high-risk trading and OTC dumping into regulated exchanges. For a long time, every run of Bitcoin has been killed by price influencers and price analysts, strategy investors, and dumpers (like JP morgen did) and take Bitcoin to a dead end of the investment.

But history showed a different story if compared the price of Bitcoin from 2016 to 2018 was much higher than in 2016. For everyone who understands Bitcoin not as an asset but as a monetary value or a store of value, the price prediction was based on the systematic of Bitcoin, not on technical analysis.

In 2018 rule-makers all over the world started to control Bitcoin users more and more. Coinbase recorded 50,000 users increase each month regardless of the Bitcoin Crash or because of it, because a cheap entry was a possibility. Calculating the demand for Bitcoin vs. Bitcoins accessibility made clear why Bitcoin must surpass $20,000 in 2020.

Everyone knows 2020 is the year of the halving event. What people did not understand is halving is not limiting the market and therefore the limitation of Bitcoins did not happen on the halving in May 2020. The reality is OTC markets provided a lot of Bitcoins from the 8 Million who are in the open circulation. Traders and newbies are conformed with the markets at that time.

The limitation to Bitcoin comes along with the so-called pandemic and the restriction to business via lockdown and the incoming effect of halving. People in 2020 recognized independence from the stock markets and are not comparable to gold.

Another big move for Bitcoin was the step to become more private and at least the best privacy coin. Because you can’t delist Bitcoin. The acceptance has grown in a way no one is able to stop people from using Bitcoin without exchanges. Bitcoin updated to Taproot and Schnoor signatures. These 2 upgrades let people send a couple of transactions as one. It is impossible to trace the confidential transactions combined.

With micro strategy, the first institutional company invested till the end more than $1 billion Dollars in two rounds of Bitcoin. Elon Musk announced to invest of $650 Million and the biggest insurance of the US just bought Bitcoins.

The DeFi hype led to a new kind of ICO hype. The hope of the financial industry to provide lends without securities and automated trading on ERC-20 Tokens and Solidity Smart Contracts became the worst hype via hacking. After the Ethereum DAO fiasco people start to ignore cybersecurity and ERC-20 tokens become the standard for every business model in Financing. Smart Contracts today are accessible for near every use case from a big database. Just copy and paste and set up the business.

Next to the price, it was predicted the biggest hacks will come in 2020, and yes, they happened. Billions of dollars have been burned by DeFi hackers accessing the ERC protocol. Ignorance of the industry warning them DeFi is not secure have been led to more losses than all hacks included the Ethereum DAO all.

During this time, we saw also the world economy melting more money creating during the pandemic the biggest fiat money bubble by debts ever in history. The trust in fiat has gone for good after we realized: we can’t payback
Another breaking point has been that Ripple XRP token sentenced to death by SEC. Warnings Ripple never has reached a use case and acceptance has been ignored. Partnering with banks and companies doesn’t mean they use the product but want to participate in the hype. Ripple was more a strategy to invest for security, not for a money alternative. The “Ripple Army” lately called also Ripple as security after it became more public Ripple is not a blockchain system but more comparable as an email system.

At least Bitcoin outperformed every investment and coin. After the crash of Yearn Finance via hack there is still no financial instrument that can reach Bitcoins market dominance of over 70%.

Bitcoin proofed to be resistance against censorship and economic disaster. With the halving effect coming into the right time Bitcoin run into a new all-time from $30655Dollar as the time of this writing. (I predicted $30,000 2 years ago) The SEC recognized Bitcoin as “a form of money” just few weeks ago. And this time its invested money. In 2017 people misunderstand why Bitcoin raises. It was not by speculation. But the fall comes via regulation.

The European market paved the way for banks can offer Bitcoin portfolios. BTM’s (Bitcoin teller machines) reached worldwide new highs in numbers. The retail business of Bitcoins reached the highest adoption when PayPal opened a trading stock for Bitcoin.

Ethereum 2.0 was firing the Bitcoin up to the moon. But what to expect in 2021?

The DeFi market will not stop regardless of the hacks. Insurances have been created to recover the volume of the stable coin behind. The total market cap is still growing. We will see new all-time highs in March and April leading the finance world and take the traditional service out of service. But in fact; DeFi is not a revolution of the banking system. It’s online banking people dreamed of since the digital era. Still, this world is controlled by banking licenses.
The reason why Coinbase is going for an IPO. We digitalized to the old world. 2021 will be the year Bitcoins privacy is growing and banks follow the call for Central Bank digital coins, which sooner or later replace stable coins. The digital transformation process via IoT will improve this year cause the pandemic calls for more data and working digital becomes the leading topic via the home office movement. Regulators in the USA started to create the George Orwell dream of surveillance and break into the privacy of these systems creating default rules of reporting.

If our new world will become a better place with Bitcoin, CBDC, and DLT? Sure, but the privacy of people will have gone for good a long time now. And this means it doesn’t change the world for people in developing countries and dictatures around the world. Bitcoin will break through this, but we have to take care that institutional can’t buy out the markets. Since Ethereum changed to Proof of Stake we can expect the largest Ethereum hack of all times after the DeFi is changing to Ethereum 2.0 fully. POS is still like ERC-20 a piece of code full of bugs.

The future is of course very interesting this year and if ethics will lead this we will see.
Bitcoin will surpass $50,000.

Written by : Prof. (Dr.) h. c. Joerg Molt

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CryptoCurrencyUSDChange 1hChange 24hChange 7d
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Ethereum1,590.7 0.09 % 2.47 % 2.70 %
Tether1.000 0.04 % 0.03 % 0.01 %
BNB210.96 0.09 % 2.33 % 0.78 %
XRP0.5102 0.48 % 1.82 % 4.28 %
USD Coin1.001 0.04 % 0.01 % 0.05 %
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Cardano0.2483 0.04 % 2.34 % 1.00 %
Dogecoin0.06159 0.11 % 1.46 % 0.79 %
Toncoin2.370 0.09 % 2.85 % 21.73 %