The new year will shape up to be one of the brightest years for Bitcoin and the cryptocurrency industry. Not to be misunderstood, this is not a price prediction. I expect 2020 to be a year the industry matures at an accelerated pace. On the crypto-native side, we will see continued innovative technical breakthroughs. On the institutional side, we can expect an increase in sophistication, in terms of education, infrastructure and more attractive product offerings. Bitcoin has demonstrated the ability to bounce back from almost anything. The first decade was defined by Bitcoin, but the next will define which cryptocurrency emerges to rival traditional currencies.
Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and a weekly columnist at DailyFintech.com.
For those of you that don’t follow the ups and downs of Bitcoin, you probably missed how terrible 2018 was, with the price falling by 83 percent from a historical all-time high in late 2017. This year has been a rebound year, After the first three months of the year, we’ve seen a steady recovery take place, with increasing optimism returning to the market.
As we are about to start the new year and Bitcoin’s second decade, let not forget that in its first decade, Bitcoin has been the best performing asset making unimaginable returns for investors.
What we’ve seen in 2019 is a continued evolution, that’s been happening for some years now. While the crypto industry is still in a prototype state and doesn’t scale well for the most part, we are now starting to see the beginning of scaling. These last 10 years have really been about developing a sufficient amount of bridges, roads and tunnels, the underlying infrastructure to make cryptocurrencies available to more and more people.
We now have the infrastructure to launch scalable decentralized applications on blockchain. We have blockchains that can handle large user bases, with low latency, little friction and zero fees. Now we can build just about anything on blockchain, that we can build on the traditional Internet. We are entering a period where the focus will shift to building services and protocols on top of the existing Bitcoin layer, by a new crop of entrepreneurs and startups.
The big event that’s coming up in May 2020, the “halving”, will be different than in the past. Every four years when the halving happens, the block reward shrinks by 50 percent. But this time it will be even more important, because of the level of maturity the industry has compiled. The diminished new supply of coins will mean that the supply and demand equation will improve. But because investors already know when it’s going to happen, there’s already been some movement in preparation, so I don’t think it will have the impact that most people think it will.
I feel more excited, much more than anytime in the last 18 months, because it feels like we are picking up momentum. Bitcoin is up this week, although it’s been down over the last month or so, but I think we are seeing a level of momentum that’s been building up for the most part of 2019. Detractors have become advocates, big money has been coming in, big tech is taking its first stab at it and governments are fueling their rockets. It feels like everyone’s putting on their jumpsuits, getting ready to take off, something we haven’t seen since 2017.
While 2017 was a crazy year with projects raising absurd amounts of money through token sales, 2018 was a down year and in 2019 it became much harder, resulting in less and less garbage. While there is some still out there, investors are getting much more discerning, being able to spot the good from the bad. I expect token sales and IEOs will rekindle this year, but with the bottom chunk of the market dropping out and less projects raising money this way, the good one’s will be in a much better position to reach their goals.
In 2020, we will continue to see cryptocurrency payments gain momentum. More governments and big businesses will announce their own cryptocurrencies, and while this legitimizes the industry, we should be skeptical. Poorly executed crypto projects will continue to be weeded out. We’ll see more and more cryptocurrencies that popped up in 2017 fade away, going to zero. Bitcoin’s halving in May could spike the price. By now Bitcoin has proven itself as a long-term investment and store of value, so expect people that believe to continue to HODL, regardless of price fluctuations.
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