As we all know by now, 2020 is no ordinary year. We saw a global pandemic, natural disasters, mass protests, struggling economies, high unemployment rates, and central banks printing money faster than we can say hyperinflation. Yet, cryptocurrencies have been a guardian angel, shining bright enough to give us a glimmer of hope.
As the year nears the end, let’s take a look at some of crypto’s most defining moments in 2020:
1. Bitcoin (BTC) reaching an all-time high
First, let’s talk about the elephant in the room. On November 30, BTC reached its all-time high of 19,857.03 USD. It’s been on track to get that all-time high for a few weeks now, but it experienced a 3,000 USD crash over Thanksgiving. It has corrected itself since then and is currently in the 19,000 USD range at the time of writing. Just as people thought Bitcoin’s trend of price spikes was over, our favorite digital currency pulls a fast one on us.
2. Bitcoin’s third halving
The Bitcoin Halving is an event that happens roughly every four years (210,000 blocks). The first one occurred in 2012, splitting the miner rewards from 50 BTC to 25 BTC. In 2016, the second halving event occurred and it cut the rewards down to 12.5 BTC. On May 11, 2020, at around 3 PM EST, Bitcoin’s third and most recent halving occurred and it cut the rewards further down to 6.25 BTC.
The halving of miner rewards is intended to cut inflation in half. In the past, this event usually started a Bitcoin trend where it would experience intense price booms.
This year, Bitcoin’s price after the halving was a bit quiet. However, looking at where the price is now, that’s not as easy to say anymore.
3. COVID-19’s effect on crypto
Because of the pandemic, the world’s financial markets have taken a huge punch to the gut. As a result, Bitcoin and other cryptocurrencies have taken the spotlight.
Since these digital assets are decentralized and have fixed supplies, they have been incredibly intriguing for investors. The market has seemingly remained to be bullish despite the events that have happened in the year. As mentioned earlier, BTC reached an all-time high recently, outperforming its peak in 2017—and if that isn’t a clear indicator that cryptos are resilient versus inflation, then we don’t know what is.
4. The shift towards cashless payments
Since exchanging cash is one of the easiest ways for COVID-19 to travel, people have been looking for alternative means of payment—including Bitcoin and other cryptocurrencies. Pre-coronavirus, ideas like contactless payments and remote jobs were questionable. Now, it seems like they’re going to be more integrated into our daily lives.
5. The advent of CBDCs
Central Bank Digital Currencies (CBDCs) have also turned into a hot topic because of the pandemic. In a way, they can even be a solution in developing countries. As China has stated that a digital yuan is in the works, we’re sitting on the edge of our seat to see how that launch could change the crypto space. Who knows, it could even shift the balance of economic power.
6. Growing adoption for DeFi
Because cashless transactions are starting to become a norm, people are beginning to warm up to the idea of Decentralized Finance (DeFi). It was one of the most popular crypto trends in late 2019 and has carried over this year. If you aren’t familiar with the concept, DeFi is the blend between traditional bank services and blockchain technology. It’s open finance that’s available to everyone.
As the idea of DeFi continues to grow, more companies that operate in blockchain will introduce their DeFi products. It feels like we’re about to see further adoption alongside user-base growth as institutional capital comes out to the digital asset field.
7. Privacy is getting enhanced in blockchain technology
If you haven’t heard yet, there was a viral Twitter hack that occurred in July. A ransomware attacker was able to take control of many prominent Twitter accounts like Elon Musk, Barack Obama, Joe Biden, Jeff Bezos, and even Bill Gates. To get the media’s attention, the attacker asked people to send 1,000 USD worth of BTC to a pasted wallet address, promising that they would get 2,000 USD worth of BTC in return.
This recent hack compromised a lot of people, including the celebrities and high-level politicians involved. However, it got people thinking: what can we do to make this system better? And just like that, discussions on improvements have sparked up. Although there are problems now, developers have taken note and solutions are in the works. Blockchain has a lot of great features that can help protect our privacy: its immutability, its transparency, and many more—it’s all a matter of implementation.
8. Cryptos are starting to gain trust from governments
When Bitcoin was first introduced to the world, governments were skeptical and afraid. Mainly, it was because people could circumvent capital controls, use BTC for illegal activities, or engage in risky investments.
Luckily, in 2020, governments have begun to see the real benefits cryptos can bring. Take Nigeria as an example. The Securities and Exchange Commission of Nigeria announced that it would regulate the trade of cryptos to protect investors, promote transparency in the space, and encourage ethical practice.
This is an excellent example of governments warming up to the idea, not hindering the technology and innovation behind crypto, and embracing the future with open arms.
9. The Dogecoin (DOGE) pump
There was a time within the year where Dogecoin, our favorite meme coin, jumped in value in the span of 24 hours. A TikTok user who went by the name of jamezg97 encouraged everyone to, well, pump the coin. This was the caption under the video:
Let’s all get rich! Dogecoin is practically worthless. There are 800 million TikTok users. Invest just $25. Once the stock hits $1, you’ll have 10 grand. Tell everyone you know.
@jamezg97Wait til the end it’s worth it #dogecoin #stocks #crypto #DogecoinTiktokChallange♬ Lets get rich tiktok – James G
It’s definitely one of the weirder cryptocurrency trends, but the video gained a lot of traction, getting over half a million views in less than a week. As a result, the price of DOGE spiked.
10. Heading to the mainstream
As more people realize that cryptocurrencies have many opportunities to benefit from, the dream of it reaching mainstream adoption becomes more within reach.
In fact, even PayPal, one of the biggest online payment services in the world, has hopped onto the hype train. They announced a new service that would allow its customers to buy, hold, and sell crypto directly from their PayPal accounts. They also have plans to increase crypto’s utility by making it more accessible as a funding source for purchases.
What does 2021 hold?
Despite everything that has happened this year, 2020 has given us some pretty good crypto memories. As for what will happen in 2021, there’s no way to know what it’ll bring—maybe it’ll bring the next big thing after Bitcoin? We know one thing for sure: we’re excited—are you?