#cryptocurrency2020

Kaspersky Lab has conducted a study, that show us almost one fifth of the world's people have ever bought digital currency. Simultaneously Deloitte reports that enterprises are also growingly better as regards cryptocurrency utilizing as a payment means as well as assets. Such information makes us think that positive progress in this area is inevitable, so what will happen to cryptocurrency in 2020? It seems that overall fine expectations are emerging, but let's dwell on this in more detail.

Facts that will influence on the cryptocurrency

Only 20% of ICO is hardly call a scam. A study of the rating site CoinMarketCap showed that out of the 2000 largest blockchain projects, a quarter more than a year did not publish updates on GitHub, and a third did not do this over the past 5 years. The crypto industry is one of the few that change so quickly. Every day, new development of fintech industry and the actions of governments significantly affect prices levels, utilizing, as well as further development of crypto. However, a number of important happens are expected in this year, that will definitely influence strongly on what will happen to cryptocurrency in 2020.

two-main-concerns-about-financial-system-stability

Bitcoin halving

If we analyze the cryptocurrency news in recent months, then most often they talk about the Bitcoin halving, which is scheduled for approximately May 2020. Then the remuneration of the miners in the Bitcoin network will be halved, which always led to a price increase of several hundred percent due to reducing the number of bitcoins available. However, opinions were divided, as some experts note that the price increase in 2019 was caused by the halving effect. Some even believe that reducing rewards will negatively affect the price, because many small miners will no longer be interested in turning on their computers to support the Bitcoin blockchain. With previous halving, the price always increased at the beginning of the month, so in the first quarter we will immediately see whether it will be the long-awaited catalyst that will increase the cost of not only bitcoin, but also closely related alternative coins, which always grow exponentially.

Libra project from Facebook

Facebook has recently met with a strong backlash from governments on its latest project, so it’s not even known whether the project will even be launched. In Europe, Germany, France and Italy are developing measures to ban the project, and there is no certainty about the launch in the USA, although CEO Zuckerberg recently announced that the launch will take place only if the regulators fully agree. He also warned investors that the project might not be launched at all. Other top managers of the social network, as well as a number of important shareholders, criticized the project from the very beginning. PayPal, Visa and MasterCard refused to participate, possibly under pressure from US regulators. Given the scandals surrounding Facebook, the question arises as to whether consumers want to trust a social network with something as fragile as financial data. On the other hand, more than one and a half billion people in the world still do not have bank accounts, and 1 billion of them have mobile phones. According to the World Bank, now these people pay high commissions for the transfer and receipt of money through the mediation of third parties. The money saved on commissions could make a significant contribution to the economic growth of countries. Central banks point to two main concerns about financial system stability and identify all network participants as for money laundering, for example, to impede the financing of terrorism. Both issues have not yet been clarified. Other large companies, such as Walmart, also work on their own cryptocurrencies. Various governments, in the European Union, in China and in Asia, have also approved and set about developing their digital currencies. There are also companies behind governments that indicate that the monetary system should remain in the hands of the latter, as Apple CEO Tim Cook recently hinted at. Various studies have shown that consumers spend a lot more on digital money than cash.

Further development of projects

Due to the crazy increase in the price of bitcoin, many who want to get rich look for other cryptocurrencies that have potential, and expect that will happen to cryptocurrency in 2020 to go to the moon, that is, to grow strongly in price. However, as a Chinese study showed 80,000 blockchain projects, their average life expectancy is only a little over a year. The short life span of most projects does not allow many to earn on such investments. When looking for a new Microsoft or Facebook, it is especially important to thoroughly study the projects according to various criteria. Find out where the company is located, what kind of team it has and what information it generally has. So at the end of hot 2017, many left billions of euros in the pockets of fraudsters who created fake projects. In addition to the main cryptocurrency - Bitcoin, Ethereum is also often referred to as "Apple cryptocurrencies", but it met with serious competition in the form of two projects. Among the 50 leading decentralized dApp applications, there are only three that work on the Ethereum platform, all others on the two EOS and TRON networks. Despite this, an important update to its network is expected in 2020, where a new energy-efficient transaction confirmation method called proof of stake will be introduced. In addition, solutions for scaling the network will also be implemented, and given the approval of regulated futures, the price of Ethereum could rise significantly. There are also other promising projects that continue to develop, for example, Ripple, BAT, IOTA, VeChain and others.

Libra-project-from-Facebook

Regulation of the digital currencies industry

The several countries administrations are already working to create the regulations for the rapid growth of crypto and companies in this industry. If this does not impede innovation, then this is excellent, as it not only reduces the likelihood of using digital currencies in criminal practices like the money laundering, but also gives greater confidence to large investors, allowing them to enter the market faster. As they say the main tasks of different states administrations is to protect their citizens. After many scandals surrounding cryptocurrencies in recent years, while users lost a lot of funds invested in fake or mysteriously bankrupt projects. For instance, the Dutch government wants to introduce relevant laws and regulations faster than other European governments. In January, the directive will come into force, according to which crypto exchanges and trustees will have to register with the Netherlands Bank, receive an estimation of the compliance of their directors and shareholders and demonstrate that their business processes comply with the requirements of resisting funding of terrorism as well as money laundering.

The arrival of large institutional capital in the industry

It's no secret that large investors are eager to enter the cryptocurrency market. On the sidelines of a number of large banks, they say that bankers advise wealthy clients to invest up to 10% in cryptocurrency in 2020, and many asset managers of very wealthy families work in the same direction. Cryptocurrency companies, such as Coinbase, indicate that they receive hundreds of millions of dollars in futures for storage or trading futures from institutional investors every week. The great thing about the blockchain is that everything is transparent, including transactions and amounts on digital wallets. A recent analysis of Bitcoin wallets showed a very strong increase in the number of wallets with large amounts. What can happen to cryptocurrency in 2020 in connection with this trend indicates good prospects for the industry. Since only 21 million bitcoins can be created and 4 million lost, their rarity is growing, which, of course, is good for the price. Big money is already entering this market and it remains to observe what effect this will have on the prices of various cryptocurrencies, as well as on the further development of the market.

Finally

The increasingly pervasive coronavirus has already significantly affected many sectors of the global economy, so many today are interested in how coronavirus epidemic affect cryptocurrency. Today, many people use the main digital currency Bitcoin to protect their investments, often comparing it with gold, so it is really important to know whether it can go up in price in the near future or can be cheaper on the contrary. The new coronavirus is most actively spreading in China and neighboring countries, according to mid-February, more than 1,500 people have already been infected. Several Chinese cities are quarantined. The epidemic may affect the value of various assets, such as Brent crude oil, due to the cancellation of many flights at airports around the world. So, more and more experts recently think that Bitcoin is already starting to perform protective functions for investments and assets. This means that when the world experiences global upheavals, cryptocurrency begins to grow in value. At the beginning of the year, when a military conflict arose between the United States and Iran, the price of bitcoin rose sharply, which, according to many, is a direct consequence of the event. After that, many people had little doubt that the coronavirus epidemic affect cryptocurrency, but how exactly, the question remains open for many. Let us further consider the various positions on this issue and their basics.

epidemic-will-not-affect-the-price-of-Bitcoin

Why coronavirus epidemic can affect the cryptocurrency?

If the epidemic gets out of hand, the consequences may be most serious, given the high level of corporate defaults, since China is one of the main players in the cryptocurrency market today, the country has a command state system that solves any problems tough. Coronavirus did not spread in a single province in China, so it poses a risk to China’s economic security in general. That is why the regulator will have to introduce tough measures, restrictions not only on the people’s movement, but also on that of capital. In this way, Bitcoin, which has become a mass technology of global cross-border movement of capital, can immediately receive a huge number of new users, in the hundreds of millions, who simply can not physically carry out transactions with fiat currencies. Moreover, other countries will be able to take advantage of the fact that cryptocurrency mining farms can stop, and this will also affect the complexity of mining, which due to this will significantly decrease in the Bitcoin network. The possibility that coronavirus epidemic affect cryptocurrency should be considered both from the point of view of changing the complexity of BTC mining, as well as from the position of the recently appeared relationship between the BTC rate and exchange-traded assets. Both options suggest the most negative scenario for the spread of the epidemic, up to a national disaster. As for the impact of market inter asset relationships, one of the main drivers for Bitcoin is gold prices and the RMB course, the correlation of prices with which is obvious. The national coronavirus epidemic could force a state of emergency in the country, which could lead to interruptions in gold mining, and since China is the global leader in this industry now, it is likely to cause a significant increase in the price of a precious metal. Also, the RMB rate will begin to weaken, which will also lead to an increase in Bitcoin prices, as it could already be observed in 2019 due to a rather high correlation. Last year, during the U.S.-China trade war, as in January 2020, amid the worsening situation in Iran, Bitcoin was in demand from investors, which led to higher prices. Cryptocurrency in these situations has shown interest in itself, as a reliable investment tool that can protect investors' assets. Amid rising gold prices and the depreciation of the Chinese yuan, we can expect an increase in the value of the leading cryptocurrency. Disabling a large number of mining farms will very quickly lead to a decrease in the complexity of mining BTC. Some believe that this may cause a drop in the value of Bitcoin, since its mining will become a more profitable enterprise than a holding, which will encourage market participants to sell their coins. At some point, this can negatively affect the value of Bitcoin, however, it will not last long, since the redistribution of the complexity of the network will not take long. The next step will be that the market very quickly finds a balance level that is beneficial for both investors and cryptocurrency miners. After such a short decline on the background of a drop in network complexity, we can most likely expect another wave of Bitcoin exchange rate growth. However, so far no one can tell exactly how much BTC can go up after that.

China-is-making-efforts-to-localize-the-coronavirus

Why coronavirus epidemic will not affect the price of Bitcoin?

There is still insufficient data on the development of events around the development of coronavirus in China, based on which it would be possible to trace a clear relationship between the infection and the cryptocurrency market. Some financiers consider the biggest problem, not that coronavirus epidemic affect cryptocurrency, but a fall in activity due to the holidays due to the Chinese New Year. They explain this by the fact that China, as you know, is the main cryptocurrency market and the biggest user in the world. Thus, the decline in activity in China will in any case affect the overall trading volumes and liquidity. There is a chance to see low dynamics of demand for cryptocurrencies, albeit with periodic surges in volatility. The global phenomena observed over the past few years have had a key impact on such major indices as oil, gold, stock quotes, and the rates of major reserve currencies, but at the same time they did not significantly affect cryptocurrencies. The effective interdependence of the cryptocurrency and the blockchain industry with offline reality and fiat currencies is quite specific. Many experts believe that the expectations of crypto enthusiasts regarding Bitcoin as a protective asset did not materialize, since there was no large-scale conversion of USD to BTC when it last lowered rates. The Federal Reserve System has not cut rates for more than 10 years, and such a reaction from the cryptocurrency market has been very revealing. With a high degree of probability in the trader's portfolio, there are not only crypto assets, therefore the behavior of such an investor is determined by the news of the global world. Today, only such an interconnection can be traced, at least until the cryptocurrency market ceases to be somewhat isolated.

Which of them is right?