The year 2020 was a big blessing on the side of cryptocurrency and blockchain technology. This is the only year where using digital payments including Bitcoin and other cryptocurrencies, was a must-do thing whether directly or indirectly. So, let us see the biggest achievements of the distributed ledger technology and digital currency sector in 2020.
The year brought a big boost in several assets including Dow Jones S&P 500. JPMorgan released its own coin called JPM coin in October; Uniswap, a decentralized finance platform, also released Uniswap V2 in May; eToro launched GoodDollar in September; and prominent people such as Spencer Dinwiddie (NBA player), as well as Mike Novogratz highly advocated for BTC and cryptocurrency in 2020.
COVID-19: a blessing for digitization, a disaster for people
2020 was treated as a disastrous year mostly due to the outbreak of coronavirus and global lockdown. In the beginning, it caused a major collapse for most global markets, including cryptocurrency. However, later on, it turned out to be a blessing in disguise in some terms.
The thing is that global lockdown pushed people to search for alternative means of doing their daily business. This has caused a significant boost in digitization, having triggered people to become interested in digital solutions, including those involving blockchain and cryptocurrency.
In its turn, this has pushed central banks including that of Japan, UK, Australia, Norway, Germany, Sweden and many others, are busy exploring and making research on blockchain and central bank digital currencies (CBDC). Currently, the US and China are the closest to releasing their digital currency.
Generally, the popularization of digital technologies has increased people’s awareness of their work. Besides, as many of those solutions proved to be quite effective for solving actual tasks, it has triggered the strengthening of trust in innovations.
Hitting all-time highs
Consequently, the growth of trust triggered the increase in the use of such solutions. For cryptocurrency, it meant the shift of trend. By the end of 2020, the entire crypto market has seen a boom by more than 160% and several digital assets gaining by more than 120%.
Bitcoin (BTC) alone has gained by 226 percent, Ethereum (ETH) by 227 percent, Litecoin (LTC) by 153 percent, and Monero (XRM) by 172 percent. CoinIdol, a world blockchain news outlet, reported that some coins have shown much bigger gains. Zap (ZAP) gained by 4985%, Pirate Chain (ARRR) by 4428%, Celsius (CEL) by 3555%, Auctus (AUC) by 3019% and Elrond (EGLD) by 2097%.
Such enormous gains attract more and more investors to the industry. For this reason, 2021 is believed to be an even more successful year for the growth of the cryptocurrency industry.
Merging of traditional and digital finance
The necessity for innovative solutions to do business also triggered giants from the sphere of traditional finance to develop and launch new services. For instance, PayPal started offering cryptocurrency purchasing and selling options. This was a big step for the entire digital currency industry.
The payment giant entered the cryptocurrency market, which allowed its clients to trade, buy and sell cryptocurrencies including BTC using their PayPal accounts. Those cryptocurrencies can also be used to purchase goods and services from the around 26 million sellers worldwide that accept and use PayPal services.
Following PayPal’s announcement, there was a drastic bull run of several major coins including Bitcoin that surged up to $19,350 at that time. Currently, the service is still free of charge but works only in the US but hopes to spread it to other parts of the world by 2021.
Other traditional payment giants are also looking to cooperate with cryptocurrency businesses to build their capacity. Visa has joined their forces with the biggest cryptocurrency exchanges Binance and Coinbase to provide their clients with cryptocurrency cards, making digital money as simple and convenient as fiat. Binance has even started delivering their cards to their clients worldwide in late 2020.
Shifting the stance of governments
Payment giants were not the only ones to admit the potential of digital currencies. The new reality also forced governments to explore new solutions to improve the welfare of their citizens.
It all started when there were rumours about the danger of physical money in terms of spreading coronavirus. Some countries including China and Hungary were even thinking to completely replace cash with digital money. However, this step would have too dramatic economic consequences. Nevertheless, the need for innovative solutions to minimize physical contacts was obvious.
This has made countries and their governments pay attention to digital currencies. Thus, the Financial Stability Board (FSB), a regulator behind the G20, has started developing a framework of including digital currencies in the existing financial industry. To do that, it joined forces with the International Monetary fund (IMF), the World Bank, and the Bank for International Settlements (BIS).
Developing countries like Argentina, Venezuela and others also pay great attention to cryptocurrencies. Besides the need to adjust to the new living conditions, it turned out that cryptos can serve as a nice way to store value amidst the devaluation of their national money.
The US financial regulators are also exploring the possibility to adopt cryptocurrency solutions. In July this year, the US Office of the Comptroller of the Currency (OCC) released a memo that provided a go-ahead for federally chartered banking institutions to begin providing crypto custodial services. The efforts by the OCC and office of the US Treasury are a substantial leap in fostering cryptocurrency adoption and use in the USA.
Paving the way for the future
Regardless of whether the pandemic ends, the trend for digitization seems to be lasting. In 2021, people are expected to further explore the potential of blockchain and cryptocurrency for both business and everyday life.
The growth in prices will most likely attract more investors to the industry during possible correction periods. For this reason, the long-term trend is expected to be bullish.
Also, at least China is going to launch their CBDC in 2021. Maybe, other countries will also join the digital currency bandwagon. In its turn, it will trigger a further increase in awareness about digital assets, paving the way for their full-fledged adoption.