“Out of adversity comes opportunity.” We like to think of 2020 just like Benjamin Franklin said. Though we can recall all the challenges 2020 made us go through, here we choose a bigger fish to fry. Let’s remember how 2020 spawned renegade thinking, and made many change their mindsets and find the ways to move forward in the new realms.
At the times when many had to look for alternative ways to drive value, cryptocurrency offered more than one proving that it’s becoming an important part of the financial system as well as technology, and it’s here to stay.
We’re going to make a recap of the most game-changing events in the crypto industry in 2020 that made many sceptical investors take a closer look at the emerging industry, and even start investing in it.
CME Group launched Bitcoin options
In January 2020, Chicago exchange CME Group, one of the world’s leading and diverse derivatives marketplace, announced that its highly anticipated bitcoin options were already open for trading. As per CME Group representative, Bitcoin options can offer their customers “greater precision and flexibility to manage their risk.”
German regulator classified crypto as financial instruments
Another big step towards giving cryptocurrency a regulatory status. The Federal Financial Supervisory Authority of Germany, BaFin, has issued guidance to clarify the status of cryptocurrencies and the regulations. The guidance applies to related business activities. And focuses on the requirements for the providers of crypto custody services operating in the Federal Republic. Starting from 2020, German banks along with other regulated financial institutions can manage cryptocurrencies on behalf of their clients. Big step!
Bitcoin dropped below $4,000
In 2020, the flagship cryptocurrency BTC seems to have been testing its lows and highs. Starting a year at around $7,000, in March Bitcoin dropped by almost a half in as little as a day, giving its holders cold sweat and sleepless nights.
But the rapid drop was followed by a rapid rise. Shortly BTC returned to the marks of the beginning of the year and since then it’s been heading up only.
Cryptocurrencies became fully legal in South Korea
Following BaFin’s example, the South Korean looked to define the status of cryptocurrencies too. In March, the South Korean National Assembly passed new legislation to provide a framework for the regulation and legalization of cryptocurrencies and crypto exchanges.
The representatives passed an amendment to the country’s financial services laws. It would authorize Korea’s financial regulators to effectively control the emerging industry and develop anti-money laundering rules among other processes.
Need to mention, South Korea has been on the vanguard of the cryptocurrency boom over the past few years with wide cryptocurrency adoption among its citizens.
First public Bitcoin fund listed on Toronto Stock Exchange
Canadian asset manager 3iQ has become the first firm to launch a fund tied to Bitcoin (BTC) on the Toronto Stock Exchange (TSX).
This event is historic as it is the first public Bitcoin fund listed on a major stock exchange. The TSX is the largest stock exchange in Canada with more than $97 billion in monthly trade.
Bitcoin halving was all the buzz in the first half of 2020. In mid May the block reward split and made 6.25 BTC per block instead of the previous 12.5 BTC. Only less than 2.5M Bitcoins remain to be mined but as per calculations, this can happen not earlier than in 2140.
Following the price boost after the previous 3 halvings, every crypto enthusiast and investor were closely looking at the event expecting a boom after this year’s halving too. Well, for now, we can say that history is repeating itself.
MicroStrategy bought $250 Million in Bitcoin and later raised more $650 million to buy Bitcoin
Publicly traded business intelligence firm MicroStrategy bought 21,454 bitcoin, using all $250 million of its planned inflation-hedging funds on the digital currency. Later on the firm announced that they planned to invest another $650 million to increase its bitcoin holdings.
This investment by MicroStrategy, shows that cryptocurrency is seen as a hedging instrument against inflation, a reliable store of value, and an attractive investment asset with high appreciation potential.
What’s more, MicroStrategy Inc. CEO Michael Saylor in a tweet offered some advice to Elon Musk regarding BTC. We’d say that’s a good piece of advice.
Central Banks started to develop national digital currencies (CBDC)
The global pandemic has triggered a rise in digital payments. Many nations, including China, Japan, the European Union, Sweden, the United States, and more, have started to work on creating their state-issued digital currencies. While the principle of their work is somehow similar to cryptocurrencies, central bank digital currencies (CBDC) will feature centralized networks where the state has more control over the users. Among 46 countries working or researching the CBDCs, China is clearly leading the race. In May The People’s Bank of China said that it completed the back-end architecture development of the digital yuan. What’s more — there are also draft laws ready to speed up the CBDC’s implementation.
Development of CBDC can be the way to the new economy and potentially can facilitate the adoption of cryptocurrencies too.
Square, Inc. Invested $50 Million in Bitcoin
Following MicroStrategy’s investment in Bitcoin, another firm, Square, Inc. announced that it has purchased approximately 4,709 bitcoins for $50 million. This purchase reflects Square’s belief that cryptocurrency is an instrument of economic empowerment and allows the world to participate in a global monetary system.
PayPal enabled cryptocurrency trading
One more big market participant took a closer look at cryptocurrencies. PayPal launched a new service allowing customers to buy, hold, and sell cryptocurrency directly from their PayPal account. What’s more the company plans to increase cryptocurrency utility “by making it available as a funding source for purchases at its 26 million merchants worldwide”.
Decentralized Finance (DeFi) has been stealing the headlines in 2020. This attention has been fueled by the development of a number of decentralized applications which unveiled more earning opportunities in crypto. Lending, yield farming, liquidity mining, automated market making (AMM), and more brought into the spotlight such projects like Uniswap, Aave, MakerDao, Curve, Balancer, Yearn.finance, and the like.
At the beginning of the year, the total value locked in the DeFi sector was $675M. In December it reached $16,67B, which is impressive growth.
Hedge fund One River Asset Management invested $600 million in bitcoin
Hedge fund One River Asset Management acquired more than $ 600 million of cryptocurrency. The company bought the cryptocurrency in November quite silently in order so as not to provoke a rapid change in BTC price. The One River Digital Asset Management (ORDAM) Fund, launched in October specifically for investments in cryptocurrencies. That’s not all. The company is planning to increase the volume of assets in BTC and ETH to $ 1 billion by 2021.
Ethereum 2.0 phase 0 launched
Ethereum 2.0 has finally launched in phase 0, which completed the opening step on Ethereum’s transition to proof-of-stake consensus mechanism. The test version of Ethereum 2.0 went live on December 1st at noon UTC with a presentation of Beacon chain genesis block. It’s planned that Ethereum 2.0 should improve the speed, efficiency, and scalability of the network. However, these complex changes will be implemented in separate phases over a long period of time.
Read more of Ethereum2.0 upgrade on our blog.
MassMutual bought $100 million in Bitcoin
There is one more proof of growing cryptocurrency adoption and demand among institutional market participants. Massachusetts Mutual Life Insurance Co. has purchased $100 million in Bitcoin for its general investment fund.
MassMutual is a 169-Year-Old company. Following this investment the company mentioned that they saw “ this initial investment as a first step, and like any investment, may explore future opportunities”. Sounds promising.
Blockchain technology is sought to help in fighting the pandemic
The end of the year shed light of hope that the long pandemic year will end in the near future. With the development of the vaccines against Covid-19, the governments are considering the “health passports” with a person’s immunity status that would facilitate a sooner return to the pre-pandemic life.
Here’s where blockchain technology comes to help – as there is a need to store the records safeguarding privacy. Therefore, such tech-driven countries as China and Singapore are already using blockchain technology with the aim to generate verifiable health records.
The World Economic Forum and IBM highlighted the effectiveness of using a blockchain to monitor the Covid-19 vaccine supply.
Bitcoin hit new ATHs
Bitcoin gladly responded to this large demand by hitting ATH several times per month. Finally, at the very end of the year, it brought the New Year cheers and reached $29,000. Given the next year is the year of Ox (Buffalo) as per the Chinese calendar, we probably can expect a continuation of the bullish trend for Bitcoin and all the cryptomarket. Well, that would be an easy prophecy for us. But one thing we are more certain about is the cryptocurrency adoption will continue next year and there are high chances it can drive Bitcoin’s further growth.
So 2020 has been full of transformational and exciting events. It feels like it’s been testing how the entire industry holds that trend (classic 2020). Well, 2021, we’re ready. Show us your best!
Do you have something to add to this list of the crypto industry events? You are very welcome! Come drop us a line on our Telegram groups, we’ll happily pick up the discussion:
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