Making predictions is a culture in the crypto industry, as this is one way to understand market volatility. Before now, many analysts and crypto enthusiasts made several predictions about crypto adoption in 2020. And because the opinions of top leaders in the world of finance affect market trends, let’s briefly review some of these quotes and recognize those that played out this year.
Crypto is better than cash
In 2013 and 2014, a philanthropist and the co-founder of Microsoft, Bill Gates, said that “Bitcoin is better than currency, and for large transactions, currency can get pretty inconvenient.” In 2020, Gate’s statement became a reality even as Bitcoin continues to play a significant role in the world’s cashless future. A glance at global financial trends also reveals a change in the tides. Reportedly, cash transactions are disappearing in most countries. The Healthcare system, due to the Covid-19-induced pandemic, is also expected to push the world closer to a cashless society.
In all, notable events throughout the year have shown that Bitcoin, altcoins, and blockchain technology are possible alternatives to cash.
Ethereum outperforming Bitcoin
Although Bitcoin recorded significant gains this year, its success story is nothing compared to the height Ethereum attained in 2020. The price of Bitcoin is known to increase after a halving event. But the case is different this year as the talk was cut short by the new wave of excitement surrounding the booming decentralized finance sector.
“DeFi” became the favorite spot for developers in the crypto industry as they built financial instruments and institutions that operated autonomously on computers and were also accessible to anyone with a smartphone. The total value locked in DeFi projects this year is over $10 billion.
Coinbase crypto exchange also deposited $2 million worth of liquidity into several DeFi projects, stating that DeFi is an indispensable necessity of an open financial system.
Although the Ethereum network experienced a lot of setbacks as a result of soaring fees from an increase in demand for block space by DeFi apps, the network still recorded significant breakthroughs. Particularly, Ethereum has begun its transition from proof-of-work to a scalable proof-of-stake protocol.
In 2014, Richard Branson, the owner of Virgin Empire, downplayed Bitcoin’s dominance, as there would be other currencies like it that may be better. Today, many market experts also agree that Ethereum will be a force to reckon with in the crypto and blockchain sector.
Increase in Blockchain-based businesses
The former CEO of Google, Eric Schmidt, once said:
“The ability to create something which is not duplicable in the digital world has enormous value, and many people will leverage that for business purposes.” The reality of this quote has played out in 2020, as we can attest to an increase in the adoption of blockchain business solutions.
The Covid-19 pandemic and other ugly events in 2020 also revealed blockchain’s potentials as a technology that promotes collaboration and trust. Institutions have begun to diversify their workflow as digitization has particularly taken over paper-based workflows. Many famous businessmen like JP Morgan also extended their banking services to Bitcoin exchanges, as the cryptocurrency has sustained an impressive performance.
Increase in crypto scams
This year confirms another of Richard Branson’s quotes: “People will make fortunes off Bitcoin, some will lose money.” Within the first ten months of 2020, crypto scammers made over $1.7 billion. Scammers also took advantage of the booming DeFi sector, contributing about 21% of the total crypto value lost in 2020.
In July, the Twitter accounts of notable public figures, such as Bill Gates, Jeff Bezos, and Elon Musk, were hacked to promote a Bitcoin giveaway scam. YouTube scams also increased, as scammers used YouTube live streams with videos of unconsenting individuals to scam people off their Bitcoin.
Cryptocurrency outperforming gold
In 2018, the CEO of Galaxy Digital Holdings, Mike Novogratz, said: “Bitcoin is the new digital gold, and it will be a legal pyramid scheme just like gold.” This year, Bitcoin has gone beyond outperforming gold. Although the DeFi boom is the primary sponsor of this surge, the narrative that Bitcoin can act as a hedge in an unstable economic world also contributed to the growth of crypto markets.
Meanwhile, Tyler and Cameron Winklevoss reinstated their claim that Bitcoin is superior to gold while speaking to the Financial Times back in 2016. And even though Bitcoin gets its value from mimicking gold’s natural scarcity and other features, the twin brothers view Bitcoin and its network as gold 2.0.
An added advantage for decentralization?
Seemingly, 2020 is a remarkable year for the crypto industry, citing major activities that prompted the operation of Bitcoin and cryptocurrency as a fully-fledged mainstream financial instrument. The involvement of PayPal and MicroStrategy in cryptocurrency is a piece of evidence.
The global healthcare sector also utilized blockchain solutions to address prevailing challenges in 2020, even before the pandemic.
In all, decentralization is taking over, as development in the DeFi space is increasingly preparing the world for a new financial future.