The year back in 2018 proved to be a hard test of both endurance and faith for most cryptocurrency enthusiasts. The bear market took many casualties, with funds closing and exchanges seeing volume numbers drop to unthinkable levels. 2019, while better in overall terms compared to 2018’s widespread despair, hasn’t shown enough mercy so far for many projects. These negative trends continued, albeit on a lesser scale. Let’s go over the most important events of the year and what can we expect for 2020.
Proof of Life
After some relative stable months to begin the year, Bitcoin started to show some signs of recovery, around the month of May. Prices bounced back from previous lows around the $8k levels which certainly set the tone for the next rally, which followed quickly, reaching what would be the yearly high of $12.5k. In the meantime, the rest of the market remained modest without much gains to report and even some further losses for mid-to-low cap cryptocurrencies.
The recovery could be explained in part due to the ongoing erosion of trust that traditional markets have endured all year, with fiat currencies tumbling across the world, plus the never ending negotiations between US and China. The Trade Wars are a big factor, not only because they create tension and uncertainty in established markets but because of what they end up communicating as a result. Tariffs, sanctions and currency control act as fuel for cryptocurrencies and intensify focus on their very essence. On top of that, unrest around the world — from Hong Kong to Chile — while not fueled by the same factors, still brings back some 2008 “Occupy Wall Street” nostalgia, when the established financial system suffered its darker hours in recent decades.
The praise of blockchain from China’s People’s Bank of China (PBoC) and President Xi continued the rally after some signs of weakness but this ended up being unsustainable. Tezos cracking the top ten cryptocurrencies by market cap, and as one of the few new listings on exchanges around the world (a previously common occurrence, now much more rare and exclusive) is therefore worth a mention, in a very tough year for alternative cryptocurrencies. Ethereum, the eternal contender, also saw an increase of adoption and activity for its very promising DeFi ecosystem.
Libra Shows Up
In June, Facebook finally announced its long-awaited cryptocurrency project, with a huge nod to blockchain technology and Bitcoin, evidenced by the release of its very own whitepaper. However, it only took a month for US Congress to inquire and confront what was quickly picked up as a threat by the establishment. Even POTUS Donald Trump had something to say, or tweet, about it.
The hearings didn’t go quite well for Libra, and one could even argue cryptocurrencies were the clear winner in the aftermath. Representative Sean Duffy stole the show focusing on the dangers of deplatforming: “Everybody can use a $20 bill,” Duffy said. “This $20 bill doesn’t discriminate on anything. You can be a murderer, you can say horrible things, you can say great things. This $20 bill can be used by every single person that possesses it.”
However, it’s clear that privacy and citizen’s rights are a mere distraction, and not the main concern for governments around the world. Instead this likely remains the still hard-to-grasp idea of losing control of money by the state, as discussed previously.
The fact is Libra started to crumble, first from the inside, with plenty of backers getting cold feet, and then all the way to the top, with top executives downplaying the project and leaving it hanging in the air. The future is uncertain at the moment, but it wouldn’t be wise (as the US congress quickly recognized) to discard Facebook and Mark Zuckerberg after just one battle. The most likely scenario is that the company is just regrouping and gaining time while they wait for the next move, now with a more clear picture of what is at stake.
Expect the Unexpected
The upcoming Bitcoin halving (which refers to the network’s issuance rate being reduced by 50% every four years) and next due around April 2020, will be without a doubt the most relevant event to look forward in the next year. Historically the first two halvings had an extremely positive effect on Bitcoin’s price, and seems plausible that history could repeat itself this time around. However, the investor mantra solemnly reads “past performance is no guarantee of future results”, with many skeptics maintaining the halving could be already “priced in”.
All amidst stricter global regulations, trade wars, hyperinflationary fiat currencies and civil unrest around the globe. Crypto is often maliciously accused of being a “sign of the times”. In the next decade, it may very well be the perfect response to it.