2020 was a great success for cryptocurrency and blockchain technology. This is the only year that the use of digital payments, including Bitcoin and other cryptocurrencies, has been a necessity, be it directly or indirectly. So, let’s take a look at the greatest achievements of the distributed ledger technology and digital currency sector in 2020.
COVID-19: a blessing for digitization, a disaster for people
2020 is considered a catastrophic year, mainly due to the outbreak of the coronavirus pandemic and the global lockdown. Initially, it caused a serious crash in most of the world’s markets, including the cryptocurrency market. Later, however, it turned out to be a blessing for the industry.
The thing is, the global blockade has pushed people to seek alternative ways to conduct their daily activities. This has resulted in a significant increase in digitization. People became interested in digital solutions, including blockchain and cryptocurrencies.
This, in turn, prompted central banks, including Japanese, British, Australian, Norwegian, German, Swedish and many others, to seek and conduct research on blockchain and central bank digital currencies (CBDCs). Currently, the United States and China are closest to introducing their digital currency.
Overall, the popularization of digital technologies has increased people’s awareness of how they work. Moreover, since many of these solutions have proved to be quite effective in solving real-world problems, it has contributed to strengthening confidence in innovation.
Reaching new records
The increase in confidence resulted in an increase in the use of such solutions. For the cryptocurrency, this meant a trend shift. By the end of 2020, the entire crypto market had grown over 160% with several assets gaining over 120% of their value.
Bitcoin (BTC) alone grew by 226%, Ethereum (ETH) by 227%, Litecoin (LTC) by 153% and Monero (XRM) by 172%. Some coins recorded much higher profits. Zap (ZAP) increased by 4,985%, Pirate Chain (ARRR) by 4,428%, Celsius (CEL) by 3,555%, Auctus (AUC) by 3,019% and Elrond (EGLD) by 2,097%.
Such huge profits attract more and more investors. For this reason, 2021 is forecast to be even more successful for the development of the industry.
Combination of traditional and digital finance
The need for innovative solutions in the field of business also caused the giants of traditional finance to start developing and introducing new services. He began to offer the sale and purchase of cryptocurrencies, among others PayPal. It was a big step for the entire digital currency industry.
The payment giant entered the cryptocurrency market, which allowed its customers to buy and sell BTC using PayPal accounts. In the future, the company’s customers will be able to use their digital assets to purchase goods and services from approximately 26 million retailers around the world who accept and use PayPal.
Following the announcement of PayPal, a bullish rally began on several major coins, including Bitcoin, which rose to $ 19,350 during that time. Currently, the service is still free, but only works in the US. Paypal intends to extend it to other parts of the world by 2021.
Other representatives of the taraditional finance industry are also looking for opportunities to cooperate with companies dealing with cryptocurrencies. Visa joined forces with the largest stock exchanges, including Binance and Coinbase. In this way, he wants to provide his clients with cryptocurrency cards that make digital money as simple and convenient as fiat. Binance started delivering cards to its customers at the end of 2020
Change of government position
Not only financial giants admit that digital currencies have potential. The new reality also forced governments to look for new solutions.
It all started when rumors surfaced about the dangers of physical money due to the spread of the coronavirus. Some countries, including China and Hungary, have even thought of replacing cash entirely with digital money. However, this step would have too dramatic economic consequences. Nevertheless, the need for innovative solutions to minimize physical contact was evident.
This forced countries and their governments to pay attention to digital currencies. Consequently, the Financial Stability Board (FSB), the regulatory body behind the G-20, has begun to develop a framework for incorporating digital currencies into the existing financial industry. To this end, it has joined forces with the International Monetary Fund (IMF), the World Bank and the Bank for International Settlements (BIS).
Developing countries such as Argentina, Venezuela and others also show great interest in cryptocurrencies. In addition to adapting to new living conditions, it has proven that digital assets can serve as a good way to store value in the face of devaluation of national money.
The possibility of adopting cryptocurrencies is also considered by financial supervision authorities. In July of this year, the United States’ Bureau of Currency Controller (OCC) published a memo authorizing the provision of cryptocurrency custody services to federal banking institutions. The efforts of the OCC and the US Treasury Office represent a significant step forward in promoting the adoption and use of cryptocurrency in the US.
Paving the way for the future
Whether or not the pandemic is over, the trend towards digitization appears to be sustained. In 2021, people are expected to further explore the potential of blcokchain and cryptocurrencies in both business and everyday life.
The price increase is likely to attract more investors during possible correction periods. This is why the long-term trend is predicted to be rather bullish.
In addition, China intends to launch CBDC in 2021. Perhaps other countries will also join the digitization of the monetary system. This, in turn, will further increase public awareness of digital resources, paving the way for their full adoption.