The Cryptocurrency Year in Review for 2020

As we sit here in December, it’s obvious that 2020 is a banner year for cryptocurrencies. To know that, all one needs to do is look at the current price of Bitcoin. It’s booming just like it was back in 2017, except that times have changed and things are very different now.

There is a fundamental shift happening in the world. A shift that welcomes cryptocurrencies as legitimate financial instruments. A shift that welcomes the opportunity to empower the individual with unique investing opportunities that the traditional financial world simply can’t match. A shift that institutional investors are willing to bet significant amounts of their capital on.

Just think about it for a moment. It wasn’t that long ago that the traditional financial world balked at the idea that Bitcoin would ever make an impact in any kind of meaningful way. Now that governments are continuing to print out money to try and save the economy, Bitcoin just might be a better store of value than gold if and when we go through another economic crash akin to that of what happened in 2008.

Nevertheless, this post is not about our world’s dark past, or the potentially dark future to come. It’s about the fact that Bitcoin and cryptocurrencies in general are becoming a guiding light for a brighter economic future.

It’s time to recount some of the major milestones that marked Bitcoin’s 2020, including:

• Bitcoin’s 2019…before the coronavirus pandemic.
• The impact of the coronavirus pandemic on the global economy.
• The exponential growth of institutional investing in Bitcoin and other cryptocurrencies.
• The impact of decentralized finance projects.

Bitcoin Before the Coronavirus Pandemic

On December 2, 2019, the price of one Bitcoin was just over $9,700. Prior to that time, the price had been moving within the same 20% range for several months. It appeared that the idea of a ‘crypto winter’ had passed and the market was still figuring out what was going to happen next.

In hindsight, it turned out that this was a time of extended consolidation where investors were likely just accumulating more and more Bitcoin every month. They knew that the future would be bright after all, but Bitcoin simply wasn’t getting traction in mainstream media the way it was at the height of 2017. It seemed like the new crop of investors that entered the foray years ago were now seasoned crypto investors happy to hold onto their assets and continue to buy the dips every so often.

Then, in the first month or two of this year, whispers of a deadly virus spreading across China with the potential to make its way all around the world began to grow louder and louder. The crypto market (and the broader global economy) was about to be hit with a devastating force. Enter the coronavirus.

The Impact of the Coronavirus Pandemic on Bitcoin and The Global Economy

Governments knew it was coming, yet despite the world’s best efforts, here we are still isolating and socially distancing, wondering when we might be able to go back to life as we know it. Some want to save the economy and get everybody back to work, others want to keep everybody at home and eradicate our world of this virus once and for all. Either way the spread of the coronavirus across the globe sent all financial markets spiralling in mid-March, including cryptocurrencies.

That downward spiral sent the price of Bitcoin down to a low of less than $6,500 in mid-March. What would soon turn out to be arguably the sale of the year on the price of Bitcoin was at the time a huge cause for concern for investors across all assets and all markets.

At the present time, we’re still working through what the world is going to look a year or two from now. Many governments are approving stimulus packages that allow people to work from home or stay at home without work, so as of now the markets are still responding positively amid the hopes of vaccines curing the virus and the potential hope of return to normalcy in our society.

Other financial experts are saying that the insolvency of the individual won’t be evident until people get back to work and no longer have government income to rely on as a way of avoiding paying down their debts. Perhaps the next great crash of the global economy is just around the corner.

That said, Bitcoin’s blockchain launched in 2009, and the white paper was published in 2008 because Satoshi Nakamoto figured the world needed an alternative to government-controlled currencies.

Today, Bitcoin’s price is at an all-time high. And as they say, history repeats itself. The next global collapse will likely be Bitcoin’s next catalyst. It appears institutional investors are looking to get ahead of the curve on that trend.

Institutional Investment in Bitcoin is Exploding

By now the fact that institutional investing in Bitcoin is ramping up considerably is arguably the worst kept secret in the world of cryptocurrencies. It’s clear that billionaire hedge fund managers, CEOs and publicly traded companies saw the March dip in prices as the best time to buy. Now, it seems as if the days of seeing Bitcoin trading in the four-figure range are long behind us.

As a retail investor when we look at the price, most of us don’t consider how much volume it actually takes to get Bitcoin to even further heights. The truth is that it does take institutional money. This is exactly why the current run-up in price is different from what happened in 2017. Grayscale Investment owns billions of dollars in Bitcoin. MicroStrategy Inc. is a small publicly traded company with hundreds of millions of dollars worth of cash reserves being held in Bitcoin. Jack Dorsey bought $50 million worth of Bitcoin for his company, Square, and even PayPal (a company that said it would never be involved with cryptocurrencies not too long ago) is allowing its customers and merchants to buy it.

Famous investing figures like Jim Cramer, Paul Tudor Jones and Stanley Druckenmiller are all taking more of a positive interest in Bitcoin even though just a few years ago, each of them was fairly bearish in on the subject, saying that Bitcoin didn’t have any fundamental value and wasn’t a real asset.

It’s obvious that Bitcoin certainly does have fundamental value. Investors are likely to pile money into it just like they will do with gold and silver as a way to hedge against inflation and a potential downturn in the economy that the world frankly hasn’t experienced quite yet, but will almost certainly have to eventually.

Decentralized Finance Projects Are Empowering the Individual and Disrupting Traditional Financial Services

Yearn Finance (YFI) is a cryptocurrency with just 20,000 coins circulating and each coin is worth nearly $40,000 Canadian. While many retail investors are turning a profit off of the cryptocurrency itself, YFI represents more than that. It’s becoming the leader of the whole decentralized finance movement. That movement allows investors to cut out financial advisors. Decentralized finance applications currently hold $14.5 billion USD in value across all borrowing, lending and yield farming platforms.

Yearn owes a tip of the cap to a project called Compound, which allows investors to borrow cryptocurrency and invest it. Together, the two projects have spurred the development of all kinds of unique and innovative ideas revolving around synthetic currencies, derivatives, and other profit generating activities that the traditional financial world offers with red tape and strings attached.

Don’t sleep on these developments. Decentralized finance projects still operate at a relatively small scale now compared to the world of traditional financial assets. Still, the concept of cutting out the middleman to keep more of the profit to yourself is steadily growing the interest of the casual observer in cryptocurrency investing.

Let Bitcoin Be the Change You Wish to See

If there is anything that we have learned from Bitcoin’s wild ride this year, it’s that Bitcoin has the potential to be the change you wish to see in the world’s financial systems. Bitcoin and all other cryptocurrencies for that matter are a ripe of feeding ground for change. With the immediate future of our world uncertain, the value of traditional government-backed money decreasing and the overall anxiety of individuals regarding health, wealth and happiness increasing dramatically, now might be the most perfect time in human history for Bitcoin to prove itself as a safe haven asset.

It’s just a matter of time before that happens. With so much promise in front of it, it’s still not too late to get in on the ground floor of Bitcoin. Paul Tudor Jones said it himself in a recent interview with CNBC. He said that buying Bitcoin now is the equivalent of getting into Amazon or Apple stock in the early days. Jones echoes the sentiments of many others who believe that there is no better time than now to buy Bitcoin.

If you’re ready to do just that, work with one of the top exchanges in Canada. Netcoins is a cryptocurrency exchange in Vancouver that serves Canadians with some of the best rates you can get on Bitcoin and a handful of other cryptocurrencies. Making cryptocurrencies a part of your portfolio is a great investment strategy with amazing potential. Remember to diversify your portfolio outside of cryptocurrency and only invest what you can afford to lose.

Odds are, the next time we do a Bitcoin year in review for 2021 and all of the years beyond that, your crypto holdings will only grow in value. The roller coaster ride of 2020 could just be the catalyst that proves you right for investing now.

The easiest way to buy Bitcoin is through an online crypto trading platform Netcoins that offers Bitcoin (BTC) and other cryptocurrencies.

Thanks for reading. For more blogs on all things in Bitcoin, you can read more here.