Bitcoin has exploded since October, climbing from its long-time $10,000 per bitcoin support level to never-before-seen highs of almost $35,000.
The bitcoin price added over 300% through 2020, a rally that included a 50% crash in March amid the coronavirus meltdown. Meanwhile, ethereum, the world’s second-largest cryptocurrency, has rallied even harder—soaring 600% over the last 12 months.
Now, as bitcoin and cryptocurrency investors try to call exactly how far this already-huge rally will run, ethereum cofounder Vitalik Buterin has revealed what he thinks is an “underrated” bull case for crypto.
“One of the more underrated bull cases for cryptocurrency that I have always believed is simply the fact that gold is lame, the younger generations realize that it’s lame, and that $9 trillion has to go somewhere,” Buterin wrote in a recent 2020 summary blog post, referring to the total value of the world’s mined gold.
Bitcoin‘s reputation as “digital gold” has grown in recent months, bolstered by a flurry of big-name investors that have named bitcoin as an emerging inflation hedge.
“If the gold bet works the bitcoin bet will probably work better because it’s thinner, more illiquid and has a lot more beta to it,” billionaire investor Stanley Druckenmiller, who, along with fellow investor George Soros, famously bet against the British pound in 1992 and made massive profits, said in November.
Meanwhile, repeated surveys (as well as endless and often hilarious anecdotes) have found younger people are far more inclined to buy bitcoin, ethereum and other cryptocurrencies than older groups. And most of those surveys are from before the coronavirus pandemic forced governments around the world to heap even more debt on the shoulders of young.
We’re now in “a world where blockchains and cryptocurrencies are well poised to play an important part, though for reasons much more complex than many people think, and having as much to do with cultural forces as anything financial,” Buterin wrote, arguing “public-blockchain-based solutions [will] just keep quietly moving forward and gaining actual adoption.”
Elsewhere, other influential voices in the technology and cryptocurrency space have echoed Buterin’s comments.
“I believe that governments will respond to all of these economic challenges by continuing to print fiat money without restraint and by taxing and regulating innovative new companies to protect old and dying companies,” Fred Wilson, a venture capitalist, wrote in a blog post outlining his predictions for the coming year.
“This will lead investors to continue to allocate capital to new forms of money (crypto) and new ways of creating and financing innovation (decentralized projects and organizations).”
After an explosive start to the year that’s seen the broad bitcoin and cryptocurrency market add a staggering $100 billion in just a few short days, 2021 looks set to be a big one for crypto.