One cannot but agree that 2020 has become a truly unprecedented year. The coronavirus pandemic that swept the whole world caused a severe economic crisis in all countries of the world and forced us to live by new rules. One of the main revelations of the outgoing year was the superiority of cryptocurrencies over fiat in the context of economic instability in the markets.
Today we will tell you about the main events in the cryptocurrency space that made 2020 special and memorable.
New Bitcoin records
Bitcoin has long been the main coin of the entire cryptocurrency market, which others are guided by. In just a year, BTC has grown from $7,300 to a historical figure of $29,000, which was recorded today, December 31. Perhaps this has become one of the most important and long-awaited New Year gifts for members of the crypto community.
Of course, it wasn’t that smooth. With the news of the spreading new COVID-19 virus emerging, all markets reacted with a huge drop. However, the first cryptocurrency recovered very quickly, and having bounced off the minimum level of $3800, it rapidly went up.
Institutional investors entered the game
The main reason for the growth of not only Bitcoin but the entire cryptocurrency market was the increased attention of institutional investors. Thanks to the crisis, major players have appreciated the advantages of bitcoin over fiat money. Even the strongest countries launched a printing press, which of course affected currency inflation.
Bitcoin has become a true digital gold, and its benefits as a savings asset have come to the fore. The colossal demand for Bitcoin from institutional investors even got its name — the “MicroStrategy Effect” — in honor of the company that invested more than $1 billion in this coin.
Others have joined, including:
- Ruffer Investment – $744 million;
- One River Asset Management – $600 million;
- SkyBridge – $182 million
- Stone Ridge Holdings Group – $114 million;
- MassMutual – $100 million;
- Billionaire Paul Tudor Jones – $100 million
- Square – $50 million
Another confirmation of crypto adoption among the big players is the story of PayPal. An international payment company from the United States has added crypto transactions for its customers. This news has become a real driver of growth for Bitcoin and other coins.
The DeFi revolution
DeFi became a real phenomenon of the past year. The industry exploded in the summer of 2020 and continues to gain traction. After the distribution of Compound tokens, hundreds and thousands of projects began to appear like mushrooms after rain. They offered profitable farming and decentralized lending in the blockchain world.
The industry has accelerated the development of decentralized cryptocurrency exchanges (DEXs), which continue to attract more and more trader capital. And while the DeFi sector remains quite young and problematic, such attention and investment could create a real alternative to traditional financial institutions.
Ethereum 2.0 launch
It’s no secret that most DeFi projects use Ethereum as a platform. But the creators of this cryptocurrency also have their own personal view of decentralized finance technologies. On December 1, 2020, the launch of the zero phase of Ethereum 2.0 (ETH2) took place. The update should completely transfer the network to the new Proof-of-Stake algorithm, instead of the current Proof-of-Work.
A month after the launch of the second version of the protocol, the deposit contract for staking exceeded 2.1 million ETH (over $1.5 billion) – an eloquent confirmation that users really have high hopes for Ethereum. Of course, the price of the cryptocurrency reacted positively to this, rising to $750, which is 500% more than at the beginning of 2020.
Among other high-profile events of the outgoing year was the growing demand for digital currencies of central banks (CBDC). China, the United States, India, Japan, Brazil and a number of European countries have been actively working on their own digital coins, which should soon replace paper money in some areas.
In addition, many stories this year have been associated with the American Securities Commission. SEC forced Pavel Durov to cancel development of ambitious TON; launched an investigation against the creators of Ripple; continues to closely follow Facebook’s Libra.
These are not all the stories that happened to our industry over the past 12 months. In fact, 2020 has become a truly challenging, interesting and eventful year, one of the most memorable in decades. Our editors sincerely believe that 2021 will become even better not only for the cryptocurrency community, but also for every inhabitant of our planet!