As the year slowly comes to an end, we can finally sit back and look at all the exciting (and not so exciting) things that happened this year.
With COVD-19 running rampant and causing mass lockdowns all over the globe, pretty much everyone’s lives have been affected in one way or another. For the world of cryptocurrencies, 2020 proved to be a somewhat positive time. In this article, we’ll go over a few things that happened in the crypto market (just in case you missed them) and what we can look forward to going into next year.
Bitcoin’s value soared
2020 was an interesting year for Bitcoin.
For a start, May 2020 saw the third Bitcoin halving ever!
For those that missed it, or are unaware, the Bitcoin halving is an event that takes place every four years. Simply put, it reduces the numbers of Bitcoins mined every ten minutes with the end goal being to create scarcity and stimulate demand. After May of this year, we are now at 6.25 BTC mined per 10 minutes.
In other news, Bitcoin also hit another important milestone. Following poor market performance back in March (thanks to COVID), the crypto coin saw its value soar past its all-time high of $19,783 to over $21,000 as of December 16th. Ironically, we can attribute this surge in value to the weakening of the dollar that was brought about by stimulus packages looking to reduce the negative financial impact of COVID-19.
Alex Adelman, CEO and co-founder of BTC rewards company, Lolli, wonderfully summarized this in his statement that major players are all “betting big on bitcoin as a safeguard against inflation, uncertainty, and the turmoils of 2020.”
Although this may seemingly represent a major win for crypto enthusiasts, we should remember the volatile nature of cryptocurrencies. What may seem like an upward trajectory, may potentially just be a brief surge that may soon be replaced by a rapid downfall.
DeFi made a name for itself
Decentralized Finance Applications also made a rather big statement this year.
Data released by DeFi pulse showed that the US dollar value of ETH tied in DeFi protocols surged from $674 million to $8.3 billion today in a matter of 8 months. These values show a stark contrast to 2019 where ETH tied in DeFi protocols grew by only 130% in comparison to 2020’s 1116%.
Much of this popularity led to the development of DeFi applications, services and products including things like borrowing, lending, trading and investing. In amongst all of this, we also saw the rise of governance tokens which allows users to vote on and effectively manage the networks they use.
On a holistic basis, the rise of DeFi protocols can be viewed as quite a positive move for cryptocurrencies and decentralized technology, because it effectively helped the community move one step forward to becoming a fully decentralized market.
The crypto market in 2021…what can we expect?
Going into 2021, the market is expected to continue along its current path.
Some predictions see massive moves in regulation surrounding crypto taxation clarity. Other regulations such as the FATF’s travel rule as well as the potential banning of crypto retailing in some markets are also thought to bring about higher traffic to DeFi applications.
We may also see a continuation of traditional financial intermediaries trying to establish themselves in the crypto world with China leading the way on the “CBDC and future of money race.”
With all this in mind, there is much to look forward to in 2021 and it seems as though we are one year closer to crypto becoming mainstream!
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