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Tokenize Xchange's Roundup of Stories for 2020

It’s been a landmark year in which the cryptocurrency rose more than 300%, with an almost 50% gain in December alone. What momentous events took place in 2020, a tumultuous year with major economic disruptions and historic volatility?

February 7: DeFi breaks $1 Billion Total Value Locked (TVL)

Decentralized Finance (DeFi) refers to the use of blockchain, digital assets and smart contracts in financial services such as credit and lending.

February 2020 marks the time when DeFi has reached a new milestone surpassing $1,000,000,000 Total Value Locked (TVL). It is an amazing achievement considering that the value locked in DeFi was only $276 million just a year ago.

According to analytics site Defipulse.com, the $1 billion locked in the markets — i.e. across the spectrum of smart contracts, protocols and decentralized applications (DApps) built on Ethereum — is almost 60% denominated in MakerDAO’s DAI stablecoin.

March 12: “Black Thursday”

The crypto community was in for a rude shock following Bitcoin’s dramatic nosedive in prices on 12 March 2020 — also known as Black Thursday for crypto.

As the coronavirus became more widespread, stock prices began to fall. Though bitcoin and other digital assets remained fairly resilient at first, high price volatility was observed after a major sell-off on 12 March, which saw bitcoin’s prices nearly slashed in half.

May 20: Earliest Bitcoins moved for first time in 11 years

The bitcoin community was alive with speculation that bitcoin creator Satoshi Nakomoto has been moving bitcoin funds as 40 of some of the earliest ever mined bitcoins were moved for the first time in eleven years.

Mined only a month after the bitcoin genesis block was minted in 2009, whoever is the owner of the bitcoins is likely to have, at least, been part of a small cabal of individuals involved in bitcoin in its early days. And could even be Satoshi Nakomoto him-or-herself.

The news sent jitters through the bitcoin trading community, initially wiping $600 of the price of bitcoin on fears that previously dormant bitcoin whales were now gearing up to sell large amounts of their fortune, triggered, potentially, by the recent bitcoin halving or the appreciation of bitcoin price which has been flirting with the $10,000 mark for the last few months.

While 40 bitcoins (more recent updates from other sources have now suggested 50) which represents less than $400,000 is small fry compared to the potential billions of dollars that are believed to be held in the hands of a handful of whales, the fortunes of these individuals is often spread out across a number of wallets. It’s the demonstration of activity from a large bag-holder that may be dipping their toe in the water in preparation for a large sale rather than the amount being moved that has spooked the community.

July: Project Ubin Phase 5 Completed

Following the completion of Project Ubin’s fifth phase, The Monetary Authority of Singapore and Temasek together released a report where Accenture was commissioned to study the applicability of the blockchain prototype network in different industries and multi-currency payments for cross-border transactions.

The report highlights the of blockchain technology in commercial applications across different industries and how these applications could be beneficial from integrating with blockchain-based payments. The benefits were validation via workshops conducted with more than 40 financial and non-financial firms who were engaged in the fifth phase of Project Ubin.

Some of the key findings of the report are,

  • Multi-currency payments were settled on the same network, this could enable faster and cheaper transaction over traditional cross-border payment channels
  • Use of smart contracts were validated on the payments network prototype in use cases like Delivery-versus-Payments (DvP) settlement with asset on private exchange, escrow for trade, trade finance, etc.
  • Commercial applications include cross-border remittance in multiple currencies, foreign currency exchange, settlement of foreign currency denominated securities along with integration with other blockchain-based platforms to enable end-to-end digitalization across many industries and use cases.

August 11: MicroStrategy Announces Its First Investment in Bitcoin

MicroStrategy® Incorporated (Nasdaq: MSTR), the largest independent publicly-traded business intelligence company purchased 21,454 bitcoins at an aggregate purchase price of $250 million, inclusive of fees and expenses. The purchase of Bitcoin cryptocurrency was made pursuant to the two-pronged capital allocation strategy previously announced by the company when it released its second quarter 2020 financial results on July 28, 2020.

The company addressed the first prong, which called for returning a portion of its excess cash to shareholders, when it announced today that it had launched a cash tender offer for up to $250 million of MicroStrategy’s class A common stock via a modified Dutch Auction offer. By acquiring 21,454 bitcoins, MicroStrategy addressed the other prong of its capital allocation strategy, which called for investing up to $250 million in one or more alternative investments or assets.

Aug 12 2020: Ethereum network hit a new all-time-high in transaction/gas fees

Ethereum transaction or gas fees reached an all-time high of $6.87 million yesterday, August 12, according to The Block Research.

The previous all-time high was during the market peak of 2017 — $4.55 million. The recent surge in Ethereum fees suggests that users are willing to shell out higher amounts to get their transactions completed in a period of decentralized finance (DeFi) boom.

In comparison, Bitcoin transaction fees have remained low. They were $1.43 million in total yesterday, which is 4.8 times lower than Ethereum fees on the same day.

October 5: Xfers Singapore announces the public release of XSGD

Singapore-based Xfers, a Major Payment Institution (MPI) licensed by the Monetary Authority of Singapore (MAS) for e-money issuance, announced the public release of XSGD, a Travel Rule compliant stablecoin, backed 1:1 with the Singapore Dollar (SGD), as part of its StraitsX initiative. Anyone with a supported bank account in Singapore can now convert SGD into XSGD tokens and vice versa at a 1:1 rate on the Xfers platform.

Under its MPI license for e-money issuance activity, Xfers can mint unlimited amounts of XSGD tokens while the corresponding fiat is safeguarded in segregated accounts with a fully regulated MAS-approved bank. Each XSGD token is fully backed one-for-one by the Singapore Dollar (SGD) and represents one SGD.

The release of XSGD is strategically supported by a versatile ecosystem of partners ranging from non-custodial wallets to institutional custody solutions, exchanges, DeFi platforms, and blockchain analytics tools.

October 8: Square Reveals That It Has Invested $50 Million in Bitcoin

Square, the payments company founded by billionaires Jack Dorsey and Jim McKelvey, just invested $50 million in bitcoin in order to diversify its largely USD-denominated balance sheet, becoming the latest large institution plowing big money into the world’s first cryptocurrency.

October 21: Paypal allows bitcoin spending

October 21, PayPal entered the cryptocurrency market, announcing that its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts.

Those virtual coins could then be used to buy things from the 26 million sellers which accept PayPal, it said.

PayPal plans to roll out buying options in the US over the next few weeks, with the full rollout due early next year.

Bitcoin prices rose alongside the news, breaking the $12,000 (£9,170) mark.

The other cryptocurrencies to be added first will be Ethereum, Litecoin, and Bitcoin Cash (a spin-off from Bitcoin).

All could be stored “directly within the PayPal digital wallet”, the company said.

November 12: Total Value Locked in DeFi Sector Hits Record $13.6B

At around 08:00 UTC on 12, the total value locked (TVL), as provided by analytics website DeFi Pulse, reached a new lifetime high of $13.62 billion.

Harvest Finance, the decentralized platform that lets users automatically “farm” assets from other DeFi platforms, is helping the charge with its TVL almost doubling over 24 hours.

The 84% boost to Harvest’s TVL, in U.S. dollar terms, saw it jump from $473.5 million to over $890 million, just shy of its record TVL at $1.09 billion seen on Oct. 23. It currently ranks sixth among other DeFi projects.

Lesser-known projects, DFI Money and ForTube also saw big hikes in locked liquidity, with 24-hour gains of over 45% and 36%, respectively.

The DeFi sector has been on a tear this year, after hitting $1 billion TVL in February, the sector currently holds 13 times greater value.

The last all-time high of around $12.5 billion was hit in late October, preceding a temporary $1 billion slump before rising sharply again to this record.

December 1: ETH 2.0

Ethereum 2.0, also known as Eth2 or “Serenity”, is an update which will see changes to the way the Ethereum blockchain functions.

Many conversations were sparked this year about the second-largest cryptocurrency, Ethereum’s highly-anticipated network upgrade. On 1 December 2020, the Ethereum began its transition from its existing Proof-of-Work model to a Proof-of-Stake one, introducing the use of sharding to improve the throughput of transactions on the ETH network.

December 10: Life Insurance Giant MassMutual Invests

Massachusetts Mutual Life Insurance Co. has purchased $100 million in Bitcoin for its general investment fund, the latest mainstream firm to dabble in digit assets.

The mutual insurer also acquired a $5 million minority equity stake in NYDIG, a subsidiary of Stone Ridge that provides cryptocurrency services to institutions, according to a statement. NYDIG, which already keeps more than $2.3 billion in crypto assets for clients, will provide custody services for MassMutual’s Bitcoins.

December 15: Ruffer Investment Confirms Massive Bitcoin Buy of $744M

U.K.-based Ruffer confirmed the size of its tremendous bitcoin investment from November.

“Ruffer’s exposure to bitcoin currently totals around £550m, equivalent to around 2.7% of the firm’s assets under management,” a spokesperson stated.

Based on then exchange rates, £550 million was worth $744.26 million or roughly 45,000 BTC based on November 2020 prices.

The investment was “primarily a protective move for portfolios” to “act as a hedge” against “some of the risks that we see in a fragile monetary system and distorted financial markets.”

Ambiguous wording in Ruffer’s initial shareholder memo created uncertainty whether the investment was 2.5% of the multi-strategy fund or 2.5% of the funds total more than $20 billion in managed assets.

December 17: 1,200% Increase in DeFi Transaction Volume, TVL $14.97B

2020 has also been an epic year for decentralised finance.

DeFi has come a long way since it first hit $1 billion total value locked (TVL) in February — at the time of writing, DeFi records a high of $14.97 in TVL.

According to a report by DAppRadar, DApp transaction volume has amassed to an impressive $270 billion in 2020, with Ethereum’s DeFi ecosystem dominating 95% of these figures. This is a massive increase from $21 billion recorded in 2019.

December 30: Bitcoin Sets New All-Time High Above $28.5K

On December 30, the price of bitcoin (BTC) set a new all-time high $28,579.59.

The all-time high means bitcoin has jumped by 46% since the start of December.

At the start of the year, bitcoin was still considered a fringe investment, disparaged by the likes of the billionaire investor Warren Buffett as having “no value.” But what changed bitcoin’s price trajectory in 2020 was its growing adoption as a hedge against the potential currency debasement that might come from trillions of dollars of coronavirus-related stimulus payments from central banks and governments around the world.

For 2020, the cryptocurrency is up almost 300%, among increased interest from institutional investors, and worries over the inflationary impact of this year’s huge coronavirus-related stimulus packages.

That sums up this compilation of the crypto-highlights of 2020.

Thank you for such an outstanding year, we appreciate your trust and support and will work to make 2021 another great year.

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