With Bitcoin prices breaking the $ 12,000 barrier after PayPal announced its intention to dive into digital assets, October offers the excitement that September did not. As chain and market data, which are indicators of Bitcoin (BTC), continue to rise, experts believe a 2017-style rally is very close.
The price of ETH has also increased, although confidence in decentralized financing is starting to shake as industry growth slows and injections slow down. DeFi was the main driving force behind the cryptocurrency’s popularity in 2020, but it now appears that other digital assets are poised to start booming and could reach huge heights by the end of the year.
What about bitcoins?
Bitcoin is likely to reach $ 14,283 by the end of the year, according to a recent report from Finder – an online comparison resource – of 30 industry experts. Bitcoin’s reputation as a safe store of value is the main reason for the generally bullish outlook, according to cryptocurrency editor Finder Andrew Munroe. He told Cointelegraph:
Several panelists noted that bitcoin is increasingly finding its place in traditional portfolios and being bought by both institutional and private investors as a hedge against inflation. Given the unique quantitative easing from central banks around the world, some participants suggested that BTC would become a widely recognized “store of value”.
Other experts cited a number of reasons for the bitcoin price spike, the increasingly clear set of rules in the digital asset market and the many failures associated with fiat currencies, such as inflation and negative prices.
By the end of the year, the average Bitcoin price was $ 14,283, yet other forecasts point to a much higher price, especially given the popular stock-to-flow ratio model created by anonymous analyst PlanB.
Could Ethereum keep up?
While Bitcoin is starting to show signs of strength over other cryptocurrencies, with commercial dominance and rising market capitalization, industry participants also have a positive view of Ether, which averages $ 513, up 40% by the end of the year. However, in the long term, experts are not sure of ETH’s sustainability. “The most cited factor in Ethereum’s short-term bullish outlook is the anticipated launch of Ethereum 2.0 before the end of the year and the impact of the efforts on the rolling supply,” Monroe said.
Ethereum became popular in 2020 due to the rise of DeFi, but some are questioning the long-term outlook and the sustainability of DeFi. While many hope to launch Ethereum 2.0, it may take years. According to Jonathan Hobbs, author of The Crypto Portfolio and former Digital Asset Manager, Cointelegraph said this is one reason for Bitcoin’s positive returns:
“At the start of this year, Defi games became very speculative, as is often the case in the industry. We see some of these currents are now returning to Bitcoin, and Bitcoin’s dominance tends to rise after the DeFi sale.”
DeFi is losing its power
With earnings from the DeFi-alt season returning to Bitcoin, the long-term sustainability of decentralized financing may be in question. In fact, in the CryptoCompare survey, 26 exchange operators on leading trading platforms were asked about the future of decentralized exchanges, with only 7.7% believing that the DEX is likely to outperform the central exchanges within two years.
DeFi’s activity is clearly declining, but some think that’s a really good thing in the long run. Lanry Jonathan Egg, a researcher at Amun AG, an exporter of cryptocurrency products in Europe, told Cointelegraph:
“A moderate immediate addict to DeFi would be disappointing to the trader in the short term, but perhaps beneficial to the industry in general. The summer bubble was not sustainable, but it showed that various aspects of DeFi (Lending, Trading, DAO) are really beneficial for private applications.”
While resilience appears to be the main obstacle to long-term success with decentralized financing, both in terms of return on DeFi and the technical aspects of Ethereum, others have cited the cryptocurrency shade industry, complex interfaces, and general unpopularity as a deterrent to DeFi’s further growth. … Monroe stated, “73% of group members said“ fraud, hype and market manipulation ”were a major obstacle to DeFi’s growth, with some comparing DeFi to the ICO’s 2017 boom.
However, many still hoped for DeFi. In fact, most panelists mentioned in the Finder Cryptocurrency report that DeFi apps will likely continue to grow steadily over the next 12 months in terms of blocked value and number of users.