According to a gold bug, 2021 will be a great year for Bitcoin and Ethereum
According to Frank Holmes, next year’s growing adoption will push Bitcoin even higher; DeFi will have a similar effect on Ethereum
2021 looks set to be an incredible year not only for gold but also Crypto Bank for cryptocurrency, according to Frank Holmes, CEO of U.S. Global Investors.
On Monday, in an interview for Kitco News, Holmes revealed that he expects extraordinary performance for digital assets like Bitcoin (BTC) and Ether (ETH) in addition to gold. The CEO believes these crypto assets are seeing increased adoption due to their key features.
Holmes believes that more and more people are embracing
As for Bitcoin, Holmes believes that more and more people are embracing the digital asset, continuing a multi-year trend:
„The number of wallets, the people using Bitcoin… have been increasing for three years now. A very good steady growth.“
Although many in the crypto industry compare Bitcoin to gold, Holmes is of the opinion that BTC is not driven by the same macro factors that influence the precious metal. In fact, Bitcoin’s fuel comes from the deflationary halving event in May:
„If tomorrow all the gold mines in the world decide to reduce the offer by 50%, I can assure you that the gold will reach $10,000.
„It’s a question of supply and demand,“ concluded Holmes. As a result of the May halving, the number of newly issued BTCs introduced to the market fell to around 900 per day, an offer that was quickly absorbed by institutions and large corporations.
Ethereum, meanwhile, continues to benefit from recent developments in decentralised finance. In terms of total blocked value, the DeFi ecosystem is worth more than $14.6 billion, and Ethereum is the basis for much of this activity. According to CoinMarketCap data, the market capitalisation of DeFi tokens currently amounts to $18.2 billion.
Speaking of gold, Holmes predicts a move of „two standard deviations,“ which could add between $400 and $800 to prices over the next 12 months. „That would put us between $2,200 and $2,600,“ he explained.
On Monday, gold futures traced a rise, adding $26.40 to $1,866.40 per troy ounce on the New York Mercantile Exchange’s Comex division.