Bitcoin logs over 800% jump for FY21, Ethereum zooms 1,300%

  • Bitcoin delivered a return of over 800% during the financial year 2020-21

Abhinav Kaul
First Published31 Mar 2021, 10:38 PM IST
FILE PHOTO: A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration.
FILE PHOTO: A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration.(REUTERS)

In a year when covid-19 dominated every conversation, cryptocurrencies gained popularity among investors like no other. The world’s oldest and the biggest cryptocurrency, bitcoin, exploded back into the limelight this financial year, solidifying its reputation as digital gold.

In terms of returns as well, digital assets enjoyed a commanding lead over other asset classes. Bitcoin delivered a return of over 800% during the financial year 2020-21. From the $6,641 level on 1 April 2020, the price of the digital currency zoomed to an all-time high of $61,711.87 (hit on 13 March 2021) during the year. It was trading at $58,587.75, down 0.5% at around 8.10pm IST on Wednesday, as per CoinGecko.

Bitcoin topped the $50,000 level for the first time on 16 February 2021, nearly a decade after the cryptocurrency hit the $1 mark on 9 February 2011.

In comparison, the BSE Sensex has delivered around 75% returns, while gold was flat for the financial year 2020-21.

Bitcoin surge

According to experts, the first leg of the rally in bitcoin during the year came on the back of retail demand, as individuals globally looked at the cryptocurrency as a hedging option against inflation. The second leg of the rally came as bitcoin went mainstream with many major institutions backing the crypto asset.

It all started with the US-based enterprise software company MicroStrategy Inc, which in August said that it was using existing cash on its balance sheet to acquire the cryptocurrency. As of 12 March 2021, the company was holding $5.1 billion worth of cryptocurrency on its balance sheet.

Elon Musk-led Tesla Inc disclosing its $1.5-billion investment in bitcoin in February was another big boost for the cryptocurrency. Tesla is so far the biggest company in the world to back the digital asset. Musk is one of the prominent names that have come out in support of cryptocurrencies during the year.

Moreover, companies such as Goldman Sachs, BNY Mellon, BlackRock, MasterCard, PayPal, and Visa have adopted bitcoin into their ecosystem.

“Visa recently announced that it would allow settlements in USDC on ethereum blockchain and is already seeing huge demand for it. In other major development, PayPal will allow its US crypto holders to pay in cryptocurrencies across its global merchant base,” said Ashish Singhal, chief executive officer and co-founder, CoinSwitch Kuber.

Both these developments are quite significant, as it is pushing crypto assets and its usage into the mainstream adoption.

“These developments are driving the latest bitcoin rally, which is pushing the bitcoin value to $60,000 level, once again. We can expect bitcoin to touch $70,000 in April, if the bull market continues,” said Shivam Thakral, CEO, BuyUcoin.

However, the adoption by institutions has come at a cost. “Until 2020, bitcoin’s performance was largely uncoupled from the performance of global financial markets, in general. But as the institutional money has started to pile into the crypto space, we can no longer disregard the narrative and events driving global financial markets,” blockchain data and intelligence provider Glassnode said in a recent note.

Meanwhile, the world’s second biggest cryptocurrency, ethereum, has gained a whopping 1,272.9% over the last one year. From the $130 level, the digital asset is trading around $1,828 level, as of 31 March.

Since October 2019, ethereum has been slowly but gradually stealing the market share from bitcoin. “In a little more than 1.5 years, ethereum's dominance has gone from roughly 8% to 11.25%. The bulk of this market share can perhaps be attributed to the growth of various decentralized apps and crypto innovations on the ethereum blockchain, such as DeFi and NFTs,” global crypto exchange Kraken said in a note.

NFTs (non-fungible tokens) and DeFi (decentralized finance) are smart contracts built on ethereum.

In terms of outlook of the world’s top two cryptocurrencies, Kraken in a note said: “With bitcoin on the cusp of reclaiming the $60,000 support and potentially even surpassing the current all-time high of $62,000, bitcoin appears incredibly well positioned to steal market share from the altcoins, should it go parabolic yet again.”

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
First Published:31 Mar 2021, 10:38 PM IST
HomeMarketsCryptocurrencyBitcoin logs over 800% jump for FY21, Ethereum zooms 1,300%

Most Active Stocks

Tata Steel

03:59 PM | 10 JUL 2024
-3.8 (-2.21%)

Indian Oil Corporation

03:59 PM | 10 JUL 2024
0.25 (0.15%)

Bharat Electronics

03:58 PM | 10 JUL 2024
-0.85 (-0.25%)

Ashok Leyland

03:52 PM | 10 JUL 2024
-2.4 (-1.05%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Capri Global Capital

03:49 PM | 10 JUL 2024
11.15 (5.2%)

Vardhaman Textiles

03:47 PM | 10 JUL 2024
26 (5.13%)

India Cements

03:29 PM | 10 JUL 2024
13.85 (4.92%)

NLC India

03:59 PM | 10 JUL 2024
12.9 (4.9%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K

    Fuel Price

    • Petrol
    • Diesel
    HomeMarketsPremiumInstant LoanMint Shorts