Cryptocurrency has changed the way the financial world used to function. Providing a seamless way to transact in a decentralized network, blockchain technology has created a way for traders to make cryptocurrency transactions. Every year, you can witness some radical changes in the industry. Cryptanalysis and crypto trends say a lot about the current condition of the sector. Speculations are the working nerves of the crypto market. Price speculation is an evident part of the market, but fortunately, the prominent crypto players have managed to survive the speculation.
The year 2020 has been highly crucial for the cryptocurrencies so far. With the pandemic hitting the world and taking almost all the industries across the globe, the crypto market 2020 also had to suffer excruciatingly. Though the ride was filled with turbulence, the future seemed to be delivering promising results. It is anticipated that after the crypto crash 2020, the positive developments will aid in maturing new assets and providing a base for the core future of finance.
In this article, we will discuss COVID-19 and cryptocurrency-2020 and see how the market overcame the pandemic’s shockwaves. Let’s get started.
Cryptocurrency in 2020 So Far
We all know that the crypto market 2020 was not stable at all. Some highs and lows shook the industry. To get an in-depth view of the market, it is essential to look into the crypto trends this year. Here are a few noteworthy occurrences in the crypto world that created a buzz and changed the whole scenario of the crypto market 2020.
#1 Halving Bringing Scarcity
Undoubtedly halving is the most concrete crypto event of the year. It is a special event where the mining rewards for new blocks are halved. The halving took place in May 2020 that witnessed a fall in the block reward from 12.5 to 6.25 Bitcoins. The total new bitcoins mined were 1,312,500 BTC. Halving brings scarcity to the market, and yet again, traders have to go through the supply-side price growth similar to the previous two halvings.
#2 New Stablecoins
We are currently living in a world where stablecoins are the promising future of the crypto world. Financial institutions have started showing interest in stablecoins that evidently states their power. With Facebook’s Libra and Tether with its list of imitators, stablecoins have certainly made their way to the market and became the center stage.
#3 Altcoins Are Not Behind
It has been a long-going prediction that altcoins are a genuine and potential threat to bitcoins’ supremacy. The cryptanalysis and the current bitcoin value is proof that altcoin is entering the new era of cryptocurrency. In a journal published about which cryptocurrency yields higher ROI, bitcoin only ranked on fifth.
#4 More Investments on The Way
If we take a look back, cryptocurrency investment was this: either buying it or holding it. The notion has completely changed in the crypto market 2020; investment can mean a few more things, including futures and CFD investing. Futures allow traders to buy cryptocurrencies in the future at a predetermined or agreed price. CFD investments enable trading on both sides, buying and selling.
How COVID-19 Turned The Tables For Crypto Market 2020?
The global outbreak of novel coronavirus was labeled a pandemic by WHO in mid-March. Since then, the pandemic is impacting the economy. Just like other markets, the financial markets were also in a dangling situation. When it comes to the crypto market, it has always remained in sharp price fluctuations, and COVID-19 made it worse. The total market value of the cryptocurrency fell from $308 billion to $118 billion in the month of March. Ethereum, the second-largest crypto after Bitcoin, saw a 66% downfall in market capital in March.
Bitcoin was always regarded as the safe haven of the financial market, but this status was also questioned during the pandemic. Bitcoin was going through a rough time, and the market was witnessing the worst loss after 1987, and the crypto fell by more than 25%, which was worse of all.
The concern with the diversification was also a significant hindrance. As cryptocurrencies do not correlate with traditional assets like bonds and stocks, it becomes difficult to diversify the volatility. If traders are able to swap their traditional assets with a portion of cryptocurrency, they can decrease the ratio of volatility. This also became the major issue impacting the crypto market 2020 in the wake of the global pandemic.
While there were plenty of downfalls in the market, COVID-19 may have changed the way people see their money. The pandemic made the cash markets to sink into oblivion with the emergence of decentralized technologies. Though the crypto market was affected, it is still the longest standing market during the COVID-19 phase. With the virus spreading at a lightning-fast pace, the paper money became a welcoming aisle for virus transmission, making people shift to digital money. People have turned to cards, eWallets, and, more importantly, crypto for making transactions. So, the crypto market situation is not as horrifying as it looks.
Top Crypto Projects That Made Their Way During The Pandemic
Just like any other industry, the crypto industry also witnesses plenty of startups that either fail or rise to stardom. Generally, the average lifespan of a crypto project is one and a half years; it totally depends on the project’s features that determine its life. In this pandemic situation, many crypto projects sprouted up. Here are a few worth-noticing projects.
#1 Medicalchain – Healthcare
Healthcare is undoubtedly the most vital industry that needs back up from blockchain technology. It is a London-based startup that claims to offer an utterly decentralized network for exchanging, managing and utilizing medical data. Both patients and doctors can securely store the data and update it on a regular basis. It has also signed a cooperative agreement with MayoClinic, the biggest academic medical center.
#2 MobileGo – Gaming
MobileGo is a gaming platform where gamers can spend digital currency and MGO tokens on different games. It is the world’s first crypto-centric gaming platform where gamers can make in-game purchases. If all goes right and the company keeps on improving, MobileGo can soon become a giant in the multi-billion gaming industry. The company also introduced the first open-source API for accepting and distributing payments with MGO tokens.
#3 Chronicled – Logistics
Blockchain is a must-have in logistics, and Chronicled is becoming a great help. It is a California-based company offering a decentralized supply chain system blended with blockchain and IoT. It automates the traceability of the goods and increases the reliability of transactions. Chronicled will minimize the logging errors during the shipment and maintain the integrity of products. With the company bagging $16 million from Mandra Capital, it has ensured a safer place in the future.
#4 Brave – Internet Browsing
It is the first blockchain-powered internet browser accommodating 20 million pre-downloads. Brave is a safe, private, fast, and open-source browser that offers web users safe web surfing while preventing hackers from exploiting personal data. Offering an immersive arsenal of features including the next-gen and blockers (Brave Shield), this blockchain browser has broken all web browsing barriers. Brave has received positive reviews from tech companies and has already released the Brave 1.0 version.
How Crypto is The Knight In Shining Armour During COVID-19?
Every industry is willing to give its contribution to improving the current pandemic situation. Blockchain is also a vital part of the fight against COVID-19. The blockchain-based platforms can be used to manage the relief distribution, donations, medical treatments, etc., transparently. With digital identity from blockchain, a medical institute can combat the spread with the help of contact tracing applications. The decentralized payment system will promote cashless payment and help in containing the virus spread.
UNICEF is also leveraging cryptocurrency’s potential to cater to the demands of the donors and support companies that are contributing to the fight against COVID-19. As part of the Crypto Fund, UNICEF has invested 125 ETH worth $28,500 in eight different companies. All the eight recipients have got $100,000 fiat money through the UNICEF Innovation Fund that is meant for developing open-source digital services to manage health, economy, and educational issues.
Cryptocurrency: Is It A Safe Haven In The Time of Crisis?
Unfortunately, the year 2020 made us question whether cryptocurrencies are a secure option in such a time of crisis or not. It is not only a mere claim by the crypto advocates, but there is a statistical analysis that worked in the general public’s perception too. In mid-March, when the economic calamity hadn’t hit the world strongly, there was some negative take on the cryptos: they were said to be not working as a safe haven during the wake of market collapse. Since March, Bitcoin and other cryptocurrencies have been continuously rallied for this. However, some positive results allow us not to completely rule out the possibility of crypto being a safe haven during the time of crisis. If cryptocurrencies continue to perform well, their movement can alter the way how they will be perceived in the future.