DeFi boom, wild market swings, and acceptance of top economies like China, Japan, South Korea, and the USA drove cryptos to the moon. The mania is not going to stop anytime sooner as gold has been outsmarted to give up the top portfolio investment slot to BTC, nice time to buy BTC with your debit card, perhaps. Most people have started seeing BTC as gold equivalent or even better than the yellow metal for long term investments. Bloomberg Galaxy’s Crypto Index of digital coins shows a significant 66% rise in people’s sentiment to investment in cryptocurrencies, in comparison to gold or other global stocks, that had shown just a 20% increase in portfolio preference. That said, it wouldn’t be an understatement to say that cryptos have jumped up the ladder to become the top asset of 2020. The question to ask what has happened driving such bullish trends for cryptos in 2020. Let’s just find it out!
Why Are Cryptos Preparing for the Moonshots?
2020 will witness another Bitcoin halvening to come into force driving the demand. In the past, the halvening effects had pushed the BTC prices to the moon, wherein 2012, prices skyrocketed from US$10 to US$100, similarly, 2016 witnessed a 400$ rise in BTC. Such past trends anticipate that BTC will outsmart the gold, but most of the experts believe that demand-supply equilibrium shouldn’t be the only deterministic aspect of the price. But the rule of thumb states that rare is a metal or a portfolio with respect to the demand, greater will be its value. That’s what happened with BTC that had shown that even after halvening, the prices of BTC have risen in the past, incentivizing miners manifolds in comparison to past earnings. Another advantage is for the network to adjust the supply as and when required as per the changing demand. That’s what happened when Bitcoin hard forked in 2017 to BCH or Bitcoin Cash.
Libra is all set to be unleashed in 2020, and it has already been backed by top companies like Uber, Coinbase, and Vodafone. Some of the peers in payments like MasterCard, eBay, and PayPal holding have already been submissive of the cryptos, and their pegging against top companies make them stable enough for use in multiple segments. At the moment, Facebook has almost 170 million users in the US, the launch of stable coin Libra will incentivize such users in one way or another for mass adoption. Having said that, Libra has the potential to emerge as an alternate currency that will be applicable to multiple goods and services payments in the US and the world. Such adoption could further scale up the demand and proliferation of cryptocurrencies across the world.
The Fed has rightfully acknowledged that cryptocurrencies are an integral part of society and it could certainly bring about a transformation that people anticipate to see. The Tether treasury has been minting USDT in large numbers and as they are highly optimistic about the rise of cryptos and people’s preference for cryptocurrencies over fiat, it is most likely that the adoption of cryptocurrencies will be on the rise backed by the Fed. At present, a lot of regulations have been closely worked upon so that cryptocurrencies could become much more accommodative in society legally.
Market consolidation is happening thick and fast for cryptocurrencies even after the bearish trends of BTC in 2018 onwards. There has also been a significant rise anticipated where previously fewer than one-third of the coins were traded in volume which was US$100,000 in a day, but they are likely expected to rise. The present market conditions have shown likely higher acceptance with coins like Ripple having hit a new high in 2020, certainly showcase good fortune around cryptos. This potential upswing is conveying greater market consolidation and enhanced adoption of cryptocurrencies for operations.
Cryptos & Fintech Collaboration
Top cryptocurrency corporations and FinTech have collaborated to find out the gateways through which regulations can be orchestrated in a subtle manner. The FinTechs have been researching to integrate wallets and ledger together for better interoperability and regulations to broaden the scope of acceptance. Having said that, cryptos could give a better run to fiat and the adoption will heighten in the coming years.
Cryptocurrencies need better innovations around to make sure that they are accommodating in the wider gamut of operations. Regulations have always raised questions regarding mainstream adoption of cryptocurrencies, but with time, the crypto community has been working to mitigate the same and envisage a larger global acceptance. As a result of that, cryptos are not going to go anytime soon, and one could say that one day buying BTC with a debit card will transform into buying BTC with fiat on the streets at the vending machines. Such developments have happened in Japan, and it will be likely everywhere else in the world.