2020 has been one of the toughest years in recent history. With the spread of the coronavirus throughout the whole world, thousands of lives passed away and our daily lives halted. The financial and business sectors were some of the worst-hit industries, which led to crippling economies and tanking markets.
Now that 2020 is nearing its end, it’s time to look back on what happened in the crypto world this year and predict what’s going to happen in the remaining months. We’ve summarized below some of the most memorable cryptocurrency news to hit the net in the last 10 months. Find out how cryptocurrencies have during this time at CryptoShimbun.
The first quarter of 2020
When the year started, there was great hope in the air in the community. Even though 2019 ended with sloping prices, there was a positive outlook for the coming year. This optimistic view roots from the anticipation brought by the Bitcoin halving day in May.
Believed to cause a bullish run in the long term, Bitcoin halving occurs every four years to reduce Bitcoin’s inflation rate by cutting the block reward in half. Mostly because people believed this event as fortuitous, they started buying and there was a significant increase in Bitcoin transactions in exchange sites.
With lots of people buying Bitcoin, its price appreciated in the first two months of the year. And with Bitcoin’s price climbing, altcoins soon followed the pattern.
Crypto prices at the beginning of the year
When the year started, Bitcoin’s price was at US$7,000 and by the second week of February, it was at US$10,000. On the other hand, Ether began 2020 with US$128 and reached beyond US$200 come February. The same pattern also happened with Litecoin. On January 1, 2020, Litecoin’s price was at US$41 and by the latter half of February, its price doubled to US$83.
Other altcoins were increasing in price, charts were looking great and it was just the second week of February. But then, news of a novel virus from China started spreading. From East Asia, the deadly virus spread like wildfire throughout the world. In response, governments put their nations in lockdown and encouraged everyone to stay at home. Businesses were put on hold and economies were starting to suffer.
On March 11, 2020, the World Health Organization declared the spread of COVID-19 a pandemic due to the surge of cases and deaths in South Korea, Italy, Iran and Japan. The following day, governments responded by putting their nations in lockdown.
In just the blink of an eye, stock markets spiralled down as investors liquidated most of their assets. Knowing that assets are vulnerable to changing prices, investors chose the safety of cold hard cash instead of volatile stock assets.
Both traditional and novel markets were affected by the WHO’s declaration of a global pandemic. Even the cryptocurrency market that is thought to be invulnerable to troubling situations wasn’t spared from the onslaught of dropping prices.
On what is now known as ‘Black Thursday’, the prices of cryptocurrencies slid down from their highs and dropped to prices lower than when they started the year. Bitcoin dropped from US$9,000 to US$4,900 in just a few days. Ether hit its lowest point on March 17 at US$107.9 while Litecoin dropped to US$35.
However, it didn’t take long before the prices of cryptocurrencies recovered. Immediately after March 12, the prices of these coins started climbing and by the end of the month, they were back to their prices when the year started.
The price surge didn’t stop there. Bitcoin, for example, rose from US$4,000 and didn’t stop climbing until it reached US$12,000 in the middle of August. Other coins followed the upward pattern, making the Black Thursday phenomenon a mere memory.
Today, Bitcoin’s price remains beyond the US$10,000 mark and steadily remains at US$11,000, Ethereum hovers in the US$300-400 territory while Litecoin rose to its peak this year at almost US$70.
Higher traffic in exchange sites
While traditional markets are taking hit after hit, cryptocurrencies are going through a bullish run. One of the possible reasons behind this is the rapid increase in traffic in exchange sites. Not only did this happen in countries famous for accepting cryptos such as Japan and the United States but also in developing countries like India, Malaysia and Nigeria. This signifies a more widespread adoption of cryptocurrencies.
While people remain locked indoors, many have delved into the world of cryptocurrencies in search of alternative ways to invest their money. With the downfall of economies and weakening of fiat currencies, cryptocurrencies proved to be the better alternative it was promised to be.
A surge in institutional demand
As the world learns to adapt to the ‘new normal’, more and more people and institutions are opening the doors to the world of crypto. It’s great that individuals are buying their fair share of crypto, but what’s even greater is institutional investors finally trying their hand in crypto. This is largely beneficial to the whole market since big investors have a huge influence over the general public.
Rise of stablecoins
Lots of people are turning cashless to lessen physical contact and exchanges as a safety precaution. Credit or debit cards are the usual methods but for those who don’t have bank accounts or can’t go through the laborious Know Your Customer process, cryptocurrencies prove to be a better alternative. And with the safety and security blockchain technology provides for cryptocurrencies, it’s clear that it’s not just an investment asset but a medium for everyday transactions.
For beginners, stablecoins are a great entry point to the world of crypto. Compared to Bitcoin and other altcoins, stablecoins are not as volatile since their prices are pegged to fiat currencies. For example, Tether mirrors the price of US dollars. Among other cryptocurrencies, stablecoins especially rose in popularity and demand during the pandemic which led to Tether (USDT) becoming the third-largest cryptocurrency in terms of market capitalization.
The future of money
Cryptocurrencies have proved themselves resilient in times of crisis just as they were meant to be. With the global pandemic still doing damage to the world economy, cryptocurrencies are here to aid by providing a decentralized money system.