2019… WHAT A YEAR!
This time last year BTC was testing key monthly support at almost $3K! Three months later, traders were already into the beginning of a 317% bull run.
What are the most relevant highlights of 2019 and what the future holds for the crypto industry are two questions I will be answering in the next couple of paragraphs.
Major highlights in 2019:
- Facebook announcing Libra cryptocurrency.
- Bakkt launching its newest futures contracts.
- Initial Exchange Offerings (IEO) became the new trend, outshining ICOs significantly.
- Major e-commerce giants such as Walmart, Amazon, and Alibaba entered the game with blockchain solutions for their services.
- Bitcoin computing power reached historical levels.
- The biggest and most powerful crypto exchanges in the world teamed up to form the Cryptocurrency Council in order to set new rules for the crypto space.
- Malta, Switzerland, Hong Kong, and other crypto-friendly countries built never-seen-before regulatory frameworks to attract capital.
The list created above may not be enough to describe all the milestones the crypto space experienced this year. The last 360 days have been a roller coaster and the 2020 promises not to be calmer.
One of the most important events next year will be without a doubt: the halving. The event is scheduled to take place in May, decreasing the number of BTC rewarded from 12.5 to 6.25. One of the most shocking events was the 2012 halving, which caused the price to rise from $10 to $100. In 2016, the history repeated itself, with prices spiking significantly as well.
I am expecting price action to react to the current bullish sentiment of retail traders. The halving may be more dramatic next year, as social media platforms such as Youtube, Twitter and Instagram have collaborated to spread the possible outcomes of this event (until a point in which traders may suffer from FOMO in the months around the halving and jump into BTC without researching much about the actual fundamental).
If halving occurs, BTC will certainly be a must asset in all portfolios, causing BTC dominance to spike drastically. People will be re-accumulating BTC in massive amounts again. Also, the altcoin market may underperform during the first few days after the halving. Nonetheless, the studies also show that from 30 to 60 days after the halving, Alts start to recover their momentum and create out-of-proportion parabolic movements. It will be interesting to see it ETH, LTC and XRP will be in sync to Bitcoin’s halving in May, Jun, and July. Keep an eye on them!
Apart from BTC halving, Libra is finally expected to be fully available during summer next year, and that will be something exciting to see! The asset-backed stable coin has been the center of several dramas in 2019 and possible in 2020. The project is still drawn in a pool of uncertainty and there are a lot of questions regulators, traders and investors will need to have clear before the actual moment of launch.
Apart from Libra, TON (Telegram’s cryptocurrency) is also expected to enter the market. Both are targeting billions of citizens around the world and regulatory frameworks are going to be key for them to succeed. One thing is certain, if governments such as the US don’t let them operate in their territory, those projects will find other ways to hack the system, such as entering more crypto-friendly environments such as Singapore.
Let’s get to another important point in the economic and financial sphere: recession. Many economists forecast the next downturn to come in 2020 due to the abnormal expansion lived in the last few years. As Bitcoin has been tied to the concept of “digital gold” or “safe haven” it is probably going to be a key asset to watch if worldwide GDP starts to decrease.
On the other hand, cryptos are not only increasing in popularity due to the hedge they may provide against the current financial system but also due to their fast pace of scalability and adoption. 2020 will possibly be the year of “DEFI” (Also known as decentralized finance). DeFi will challenge many of the businesses and processes we know in the present by using decentralized apps to make our lives easier. Will major commercial and investment banks change their traditional services to allow global finance to take new roads? I believe they will… and the global economy will be experiencing a 360 degrees change due to that.
Private banks are not the only ones jumping on the trend, but also central banks. Central bank-backed digital currencies (CBDCs) are one of the terms that emerged this year! In 2019 we saw the People’s Bank of China (PBOC) officializing their work in a new digital currency that will soon be used in the whole country. Many enthusiasts believe that the FED will step in as well in 2020. The beliefs are not as unreal as it may appear, as several representatives from the FOMC have already supported the idea of creating a state-backed digital greenback. I am sure we will see juicy announcements from the Fed regarding this digital analog of the USD.
Ethereum 2.0 is also expected to be launched in 2020. Their consensus model hasn’t changed much since its creation, but 2020 certainly holds milestones for the ETH tokens. The update is going to help the currency to scale significantly by introducing a proof-of-stake mechanism, instead of using expensive proof-of-work mining. Also, ETH 2.0 will welcome the concept of “sharding”, aiming to improve the speed of all its transactions.
An additional projection that caught my attention was the rise of commission-free trading. Retail trading is becoming increasingly popular as well as the creation of small exchanges and competitive financial services, that’s why commissions are dropping heavily.
All in all, things change in the speed-of-light in the crypto space and I am sure we are going to see more shocking events that the ones I mentioned before in 2020. The new year will also mark the beginning of a new decade and this new decade promises to change the lives of many, the question is… are you ready for it?