Crypto Review 2020: Digital Assets Performance Across the Year

Digital currency markets have skyrocketed in value all year long. It is in contrast to the gloomy global economy along with the aftermath of covid-19 responses. The prices of Bitcoin have been hovering at amounts unforeseen since 2017. The crypto asset with the largest market cap happened to gain a whopping 159% since January 5, 2020. Moreover, various cryptocurrency assets have delivered spectacular 12-month returns. This article will shed light on the crypto review for the year 2020.

Crypto Review 2020: Bitcoin Forays into the Mainstream

Bitcoin happened to graduate from the digital assets playground to mainstream global investment. Current investors have the means and intel to buy Bitcoin themselves. People are witnessing it in real-time, which happened quicker than expected. Pretty soon, investors will look out for crypto hedge funds and not own any Bitcoin. They seek to fund managers to provide the crypto exposure inaccessible to them. As a consequence, active-managed passive indexes and hedge funds are viable. They will focus on high allocations to Bitcoin, and have a pretty short shelf life.

2020 has been out of one’s mind, to state the least.  While the global economies suffer landslides, the crypto economy happens to be thriving. The nation-states’ COVID-19 response entailed citizen lockdowns and severe economic shutdowns. This wreaked financial havoc on the public. Also, equities bonds, stocks, and the plethora of conventional commodities lost notable value. On March 12, 2020, the bottom dropped out on all, including digital asset markets.

But, when it comes to cryptocurrency markets, crypto has persevered. Various digital assets have outperformed approximately every traditional investment under the sun. Reports suggest Bitcoin was trading for 7411 USD/coin on 5th January 2020 and has since gained 159% to date. Here are some of the other key highlights for cryptocurrency this year.

Crypto Review 2020: The Key Crypto Events of 2020

Rising Price of Bitcoin Amidst Turmoil

The price of Bitcoin burst through its all-time high of $20,000 at the end of November. Bitcoin traded at these levels the last time approximately 3 years before. But, the crypto space made remarkable leaps since 2017. Bitcoin happens to be revealing its lasting power. The pandemic led to fiat and crypto plotting similar trajectories through sell-off.

Bitcoin’s price rose in proportion to gold. The shift forged a narrative that Bitcoin happens to be an emerging safe-haven asset. This led to coupling from the conventional markets ever since the rise. As per reports, there have been recording volume hikes on crypto exchange platforms. The exchanges also have been witnessing sustained levels of new customers throughout 2020.

Digital Assets Found its Foundation in Unstable Times

2020 has been one of the most difficult years in modern times. In 2019, the global pandemic affected 65 million people leading to 1.5 million deaths.

It has made people change the way they live their lives. From how and where they work to shelter in the home: everything has changed. The changes also include children’s schooling, interaction with local communities, and many more. With all the heartache and pain, something happened along the way. The changes from policymakers and Central bankers became visible in 2020. This led to the creation of one of the most notable catalysts of interest for Digital assets.

2020 was one of the most significant years for Bitcoin adoption. It led to the reimagination of conventional financial operations. Borrowing, lending, and collateralization performed via decentralized protocols have also increased.

Visionary Performance of Alternative Asset Classes

South Africa happens to rank third worldwide in crypto ownership. The primary usage is speculation and investment, rather than utilizing crypto payment processing. Till 2020, there are different opinions on whether Bitcoin happens to be a safe haven asset or not. Some analysts predicted Bitcoin surging throughout the worldwide market sell-off. Meanwhile, others declined when stock market investors liquidated their investments for accessing cash.

Investors diversified to alternative assets like gold and Bitcoin during economic uncertainties. Bitcoin has itself shown to be resilient during the first global crisis. It has outperformed the S&P 500 and gold in 2020. Bitcoin indicates that cryptocurrency is capable of decoupling from macroeconomic movements. The rally of 2020 differs from previous bull runs in 2017. The retail investor’s fear of missing out drove the former. In 2020, sophisticated investors happen to be taking off longer positions.

The pandemic has caused various fund managers to re-evaluate their attitude toward crypto. Organizational professionals stated that crypto has longer with it being an asset class. Institutional investors are discovering and incorporating digital asset strategies. This is a key indicator signifying a maturing marketplace.

Bitcoin Shines in the Crypto World

Approaching the end of 2020, various headlines rocked the Crypto world. The biggest news was the PayPal-Paxos partnership bringing crypto to 300 million users. It is currently limited to a few large-cap coins, like Litecoin, Ether, Bitcoin, and Bitcoin Cash. The collaboration led to a new Bitcoin rally, reigniting mass crypto adoption calls. As far as 2021 crypto projections, this renewed confidence will help gain momentum.

With participation from the biggest financial powerhouses, 2021 will witness further progress. We will also see more news of high-net-worth people betting on Bitcoin. Bitcoin trading volume has not reached true safe asset stable levels like gold. But, it has and will continue to show inflation-resistant characteristics. Cryptocurrencies along with Bitcoin will be decoupling from conventional assets. This might drive more institutions to add Bitcoin to their treasuries.

Stablecoins Discovered a Stable Home

Bitcoin is the undisputed king of Crypto. It empowers people with its uncensored, decentralized monetary systems. Stablecoins have appeared as a useful tool to broaden social and economic aims. In the upcoming days, stablecoins will hedge against inflation and volatility.

The growing adoption in South Africa, Turkey, and Nigeria serves as evidence. Euro or USD-pegged Stablecoins will help protect investor assets. This will help the ones planning to avoid exposure to crypto volatility. It is one of those trends that people expect to proceed unfolding. The rapid progress of stablecoins pushes Central banks to continue R&D for CBDC creation.

Crypto Review 2020: Covid-19 Pandemic Pushed Social Tokens Mainstream

Artists and creators had to realign their fan engagement and monetization strategy. Many turned to live streaming and virtual engagements. Others focused on monetizing their social media handles like Twitch or YouTube.

It was social tokens that catapulted crypto from a niche to the mainstream. Earlier in 2020, social tokens happened to be intriguing. It was a potential option for artists and creators to connect with their fanbase. Influential celebrities did not need much convincing once the base technology was ready.

Instead of using a platform and earning low revenues, creators can use their own tokens. They could create their own economies and communicate with fans. according to their own terms rather than following the norms of the platform. Blockchain technology took the decision-making process out of the hands of bigger platforms. It placed power into the hands of the fans and the creators along with the community members.

The Worldwide Pandemic and Online Privacy Concerns through Decentralization

Online threats and concerns about individual privacy were developing in recent years. From hijacked doorbell cameras to data breaches, there was an increase in incidents. Online privacy solutions were crucial, driven by worldwide protests questioning government surveillance.

With decentralized and end-to-end encrypted systems, individuals were learning about the internet’s pitfalls. The events unfolded essential developments in privacy law as well in 2020. Global regulations intended to strengthen privacy protection were getting drafted. Decentralization played a key role in supporting end-to-end encryption. It ensures that privacy systems are not only resilient but also effective.

Thematic Investment has Driven Digital Asset Performance

Thematic investing has driven returns across structured tokens, rewards, DeFi, and staking. The decentralized finance sector has been hands down in digital assets.

Decentralized trading exchanges emerged as an impressive subsector with all-time record high volumes. The growth and strength were also seen to be coming from asset management protocols. Other areas included lending and borrowing platforms, synthetic assets, and insurance. Several diversified decentralized finance tokens created a robust subset of returns.

Apart from that, these robust returns did not arise from the growth of platforms. Rather, most of the returns owe to enhanced economics and structured tokens. Flexibility has enabled token issuance to transform rules and improve features. Especially the ones that come with buying the token and participating in the network.

Existing Non-Crypto Native Organisations Utilised Tokens

Setbacks by the negligence of investment bankers and regulatory clarity halted progress. In time, on-crypto native organizations have been utilizing tokens throughout 2020. For example, Reddit issued tokens. Utility tokens can find uses in capital structures as it complement debt and equity.

Crypto Review 2020: A Low-Risk and High-Reward Career Move in 2020

2020 has been the time to bet on your career in cryptocurrency. In the meantime, potential rewards happen to be as high as ever.

The risk tolerance required to explore crypto has decreased many times in 2020. Therefore, the breakout success stems from endorsement and the market cycle. This indicates the resiliency of the asset class and the people who believe in it.

Markets have validated the efforts of those who kept developing from 2018 to early 2020. Therefore, the crypto risk profile is now more tolerable, promising high potential rewards. Though the industry is in the embryonic stages, there has been tremendous progress.

Crypto Review 2020: Factors Making Cryptocurrency Attractive in 2020

Bitcoin comes with a finite supply and operates on a model of deflation. This indicates a gradual decrease in Bitcoin releases as it reaches 21 million. There is approximately 18.5 million Bitcoin in current circulation. This happens to be different from Fiat currencies. Fiat currencies use an inflationary model. The central banks print extra currency at will.

Zimbabwe and Venezuela are examples of such a strategy. Therefore, the hyperinflation examples give rise to the notion of Bitcoin as an effective hedge. The third Bitcoin halving happened in May 2020. Two previous halvings preceded this, leading to dramatic price increments. Halving is a predetermined reduction that occurs once every four years. While the first having happened in 2012, there were approximately 43000 Bitcoin addresses. The second halving occurred in 2016 when there were approximately 7 million. Nowadays, there are more than 48 million Bitcoin addresses.

The potential use cases for crypto and blockchain have increased due to covid-19. This gives an idea of how they could integrate into the future financial system. Blockchain can create a framework to deliver sustainable, scalable, and universal basic income. It can actualize cross-border money transfers without the requirements for intermediaries. This will decrease both corruption and cost. Thus it is one of the most promising technologies in the upcoming years.