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the speculative peak of 2017, cryptocurrencies have initiated a fairly healthy correction process. With the Covid-19 crisis, the intense risk aversion of the start of the year caused a major low in many cryptocurrencies. The subsequent easing of the financial stress, the massive injections of liquidity, as well as the recent attempts at institutionalization caused an extremely powerful rally in virtual currencies. There is no shortage of cryptos with 3- or 4-digit performance. The challenge for 2021 will be to seize any bullish or bearish opportunities.
BITCOIN: THE REFERENCE CRYPTO CURRENCY
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CRYPTO CURRENCY: 7 VIRTUAL CURRENCIES TO FOLLOW IN 2021
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After the speculative peak of 2017, cryptocurrencies have initiated a fairly healthy correction process. With the Covid-19 crisis, the intense risk aversion of the start of the year caused a major low in many cryptocurrencies. The subsequent easing of the financial stress, the massive injections of liquidity, as well as the recent attempts at institutionalization caused an extremely powerful rally in virtual currencies. There is no shortage of cryptos with 3- or 4-digit performance. The challenge for 2021 will be to seize any bullish or bearish opportunities.
BITCOIN: THE REFERENCE CRYPTO CURRENCY
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Capitalization: $300 billion
Daily volumes at the end of 2020: $ 15 to 25 billion (7% of capitalization)
2020 price variation: + 170%
Bitcoin remains the main cryptocurrency and gives a good overview of the trends of all other cryptos. 2020 will have been a year of all records for Bitcoin. Its capitalization has multiplied by more than 2.5 over the year! Bitcoin's capitalization has overtaken that of companies like LVMH or Bank of America.
The rally in Bitcoin can be explained mainly by the injections of liquidity, the drop in financial stress that results, but also the desire to institutionalize cryptocurrencies. 2021 will be a defining year for Bitcoin. The dangers would be those of an abusive speculative dynamic or of a powerful return of risk aversion due to economic readjustments.
Conversely, Bitcoin should continue to be fueled by the fall in the dollar index, the continued injections of liquidity, and its future use. However, the risk of corrections could appear in the medium term due to possible strains on liquidity.
2.ETHEREUM: THE MOST USED BITCOIN AND CRYPTO CHALLENGERCapitalization: € 58 billion
Daily volumes at the end of 2020: € 7 to 10 billion (15% of capitalization)
2020 price variation: + 340%
Ethereum (ETH) is the second largest cryptocurrency in terms of valuation. In annual average performance, ETH ranks among the best large cryptocurrencies. ETH is often considered the most widely used virtual currency. This is because of the presence of many tokens (cryptocurrencies issued by companies) that are based on the use of ETH. ETH may be associated with a stock market index, as the companies that make it up are players in the crypto industry.
However, ETH remains more volatile than Bitcoin. Daily volumes in relation to capitalization are proportionately greater. ETH will be interesting to follow in 2021 depending on the extent of democratization among agents and the financial stress on the markets.
BINANCE COIN: THE CRYPTO THAT INVITES ITSELF IN THE COURT OF THE GRANDSCapitalization: € 3,460 million
Daily volumes at the end of 2020: € 211.6 million (6% of capitalization)
Price variation 2020: + 110%
For its part, Binance Coin went from nearly € 1.7bn in capitalization to more than € 3.5bn, which shows the scale of capital flows in 2020 and which suggests quite well the break between the increase in 2017 and that of 2020: investment is no longer just speculative.
Binance Coin, issued by the famous platform of the same name (Binance), is among the 10 largest cryptocurrencies in the world. Binance is one of those giants who are profiting from the democratization of cryptocurrencies in individual savings. A rise in the prices of the main crypto currencies could only benefit the platform. However, due to the correlation between the price of BTC and Binance Coin, special attention should be paid to possible corrections in 2021.
RIPPLE: MUCH MORE THAN A CRYPTO, A PASSPORT TO DECENTRALIZED FINANCE
Capitalization: $19 billion
Daily volumes at the end of 2020: € 5 to 8 billion
2020 price variation: + 135%
Among the biggest cryptocurrencies, the ripple stands out in the landscape. The Ripple has indeed benefited less from the return to the levels of late 2017 / early 2018, although its capitalization has multiplied by more than 2.5 over the year.
Ripple is a start-up that has made no secret of its ambitions this year to set foot in DeFi (decentralized finance). Above all, the company offers its services to institutions in order to make fast and international payments. Although its annual average performance is statistically lower, the importance of the ripple makes it an attractive cryptocurrency.
LITECOIN: A COMPETITOR OF BITCOIN WHO KEEP IN THE TOP 5
Capitalization: $5.4bn
Daily volumes at the end of 2020: $2 to 3 billion
Price variation 2020: + 160%
Litecoin (LTC) is a competitor to Bitcoin. It retains its place in the top 5 capitalization cryptos. Its quantity is ultimately limited to 84 million LTC, against 21 million for BTC. This cryptocurrency accepted by many agents offers greater speed in mining (2min and 30 seconds per block).
Litecoin is a cryptocurrency to keep in mind, if only because of the momentum started in 2020. However, unlike BTC, Litecoin is still well below its records. As long as the trend remains strongly bullish across all cryptos, Litecoin could benefit from a relative catch-up effect. Conversely, risks may persist with crypto tensions.
CARDANO: A CRYPTO BASED ON A DOUBLE BLOCKCHAIN AND WELL SET IN THE TOP 10
Capitalization: $4 billion
Daily volumes at the end of 2020: € 520 million (13% of capitalization)
2020 price variation: + 350%
Also in the 10 largest crypto currencies to date, there is Cardano (ADA). Cardano is a blockchain platform that stands out from its competitors by the existence of a dual blockchain. This allows secure and scalable transfers (capacity to respond to high demand).
Even if Cardano does not return to its late 2017 / early 2018 levels, the momentum set in motion remains interesting while trading volumes have reached new records, which shows the interest of investors in 2020. The stake will be to know. if this interest will also be perceptible in 2021 and if the company will be able to meet its ambitions.
CHSB: A "SMALL CRYPTO" THAT HAS EVERYTHING OF A GREAT
Capitalization: $ 110 million
Daily volumes at the end of 2020: 1 to 2 million $
Price variation 2020: + 1,100%
The CHSB is part of what we could call “Small cryptos”, with an interesting profile. Its capitalization is over 110 million euros, up from 7 million in January 2020. The CHSB token is issued by the company SwissBorg, a growing crypto investment application. The company raised nearly 50 million Swiss francs in 2017 and really came out of the ground this year.
These cryptos remain very volatile but with significant and serious long potential. 2021 could mark a continuation of the observed trend.