SUNDAY THOUGHTS - All-Time Highs by the End of the Year

Nov 08, 2020

It is time again! The euphoria is back in the crypto space! And although everyone in the sector is aware of the crypto market's volatility, the mood is somehow different from what we experienced in August. Maybe it has to do with the fact that the US election is over. Perhaps it has to do with the fact that big institutions are buying more Bitcoin. It is possible that there were just a few whales pumping up the prices again.

Anyway, the euphoria is back after rather difficult months! But now the question is how to go on. Do we just shimmy from bubble to bubble, from one all-time high to the next? In today's SUNDAY THOUGHTS episode, we will present to you the reasons that make us believe that we will see the Bitcoin all-time-high by the end of the year. We will also tell you why Ethereum, altcoins, and all the DeFi protocols will follow sooner than you think.

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Bitcoin

It is quite clear that Bitcoin has initiated the development of rising prices. In the last seven days, the price rose by about 14%! This may be a remarkable price increase for an altcoin, but it is like a small rocket launch for Bitcoin! That is because Bitcoin is the oldest cryptocurrency in the world, and by most seen as digital gold. To outsiders, Bitcoin's development may seem volatile in general, which is true somewhere. Still, this volatility is in no way comparable to the volatility of DeFi protocols or various altcoins. However, mostly the timing was kind of funny. In the last few months, we believed that the falling prices would rise again after the US election because then there would be certainty on the market again. We thought that if stock prices rose again, this would also affect the prices of cryptocurrencies. Because the crypto market correlates with the stock market, right? But the US election had just ended a few hours ago, and the stock markets are not rising.

And what did Bitcoin do, even before we knew who won? Bitcoin was rising like crazy, and for the first time in years, people are talking about the next All-Time High! What the F***!?

But anyway, that shouldn't be surprising because that is actually what most people have always seen in Bitcoin. The perfect Store of Value! Now large institutions, such as MicroStrategy, have invested a portion of their assets in Bitcoin. Furthermore, PayPal offers Bitcoin for purchase on its platform. In short: Bitcoin is establishing itself in society.

I have also not heard people saying that Bitcoin can have no value because you cannot touch it for ages. Meanwhile, even my 75-year-old grandfather, who doesn't even know how to send an email, has understood that.

But back to the US election! The remarkable aspect at this moment is just that the US-election ended a few hours ago. However, the uncertainty of what will happen the next days is not over. Trump is still very salty and announced himself as the winner a few days ago. Now, after Joe Biden won, Trump still won't accept the election's result. No matter who you voted for: This was one of the weirdest elections in the USA's history. Abroad, the developments in the USA are perceived as very toxic and uncertain. If the theory of falling prices in the market during uncertainty was still current, Bitcoin would actually have to be in a low spot. But that is not the case! Of course, Bitcoin has fallen a bit, but volatility is completely normal, even in a bull market!

On the contrary! Bitcoin leads the entire sector out of the valley of dumping prices. That is the reason why we at DEFI WORLD are incredibly bullish. In August, the situation was completely different! Altcoins and Ethereum caused prices to rise while Bitcoin has more or less moved along. But at the end of the summer, the bubble burst.

I am convinced that this also has something to do indirectly with Bitcoin. Because, as already mentioned, even broader sections of society are investing money in Bitcoin! In case of rising prices, and thereupon the hype of the large and well-known media returns, more institutions and private people dare to go into the "Altcoin Forrest". If the Bitcoin prices do not rise, the altcoins' growth is somewhere limited - the bubble could burst again.

But how will Bitcoin move from here? None of us has a crystal ball, but we at DEFI WORLD are very bullish due to one crucial fact. After the last US election in 2016, the Bitcoin price increased by about 47%! In general, 2016 was similar to 2020 in terms of Bitcoin price development. At the beginning of 2016, prices were relatively low. Then they rose rapidly; however, prices fell just before the US election only to increase again explosively until the end of 2016.

This model could be transferred almost 1:1 to 2020.

However, in contrast to 2016, Bitcoin prices pumped heavily, even though the election was not over at that time. And now we have the certainty everyone was looking forward to.

Nevertheless, in the case of Bitcoin prices increase again by 47%, the old all-time high would be easily achieved by the end of the year.

In plain language: Yes, we are bullish!

Ethereum

Honestly, it's almost a shame that the announcement of the launch date of ETH 2.0 seems to have gotten lost in the media hype surrounding the US election and Bitcoin.

However, the wait is finally over: We have the certainty that ETH 2.0 could go live starting on December 1st, 2020. A historic event for the entire sector.

ETH 2.0 will make Ethereum not only more scalable in the long run but also more interoperable.

This is not only good for Ethereum but for all protocols built on Ethereum, which represent the largest part of the DeFi sector. Some have discussed that Ethereum could become bigger than Bitcoin - a legitimate discussion for a long time. Ethereum is a fundamental part of the entire crypto industry. Now, the blockchain has taken a decisive step into the future.

But what does this mean for the price development of Ethereum? Of course, the following thesis must always be treated with a certain amount of caution. Still, Ethereum has followed Bitcoin's price development, and the announcement of ETH 2.0 was an additional catalyst. The price of Ether is approaching $500 again, which is a significant milestone. Let's suppose that Ethereum reaches this milestone before December 1st, which is quite realistic. In that case, Ethereum could also achieve the next old all-time high in the coming months.

If we assume a similar development as in 2016 or as last summer, and if Bitcoin continues to perform as well as it does now, this thesis is very plausible.

DeFi and Altcoins

If Ethereum performs very well, the DeFi protocols will probably follow. This has now happened anyway after the positive price development of Ethereum.

Also, interoperability has developed further since the summer. On Polkadot, for example, you can find more and more exciting projects.

Polkadot has also seen its price rise after the pumping of Bitcoin and Ethereum.

It is becoming one of the most essential blockchains in the space - or maybe this is already the case.

In the sector of altcoins and DeFi protocols, we could see the highest returns and see a similar price development as we experienced last summer. Because these are, if you like to put it that way, correlated to Bitcoin and Ethereum.

Conclusion

In any case, the mood in the sector is positive. Everywhere, whether on Twitter, Telegram, or Discord - the mood is consistently euphoric. Ethereum has taken a fundamental step into the future, and Bitcoin, it seems, has reached a new stage of development. Although I'm not a fan of numbers or any crazy statistics, I must admit that the current statistics suggest a further rise in Bitcoin and Co's price. Regardless of how much you should interpret these numbers, it is currently difficult to find arguments against Bitcoin investment. And even if another black swan event were to occur that would shake politics, society, and the economy, I believe that Bitcoin is now considered as the perfect store of value to hedge against these kinds of events.

However, one thing is quite clear: Let's suppose Bitcoin and Ethereum are proceeding to rise so steadily. In that case, we will see even more extreme price developments with altcoins and DeFi protocols because they are even more volatile. So, this is basically a kind of domino effect.

All in all: We are facing fascinating times with endless opportunities!

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