Cryptocurrencies and blockchain have been major news for several years and look set to take off in a much bigger way in 2020. 2019 was a particularly remarkable year in the crypto-market worldwide. There were evolving and maturing new and innovative trading methods, new groupings and several blockchain protocols.
Global regulatory bodies have started to become less apprehensive when dealing with cryptocurrencies, and even began developing their own blockchain infrastructures.
To push innovation forward, even China entered the world of global competition. It’s obvious that the market for crypto and blockchain is certainly on an uptrend. Momentum is picking up and the market looks very promising to 2020. So what trends should you look for in 2020?
DeFi – Decentralized Finance
Known as DeFi in popular culture, decentralized finance is an open-source, permissionless, and transparent financial service ecosystem that is available to everyone and operates without any central authority. Users maintain full control over their assets and interact with this ecosystem through peer-to-peer (P2P), decentralized applications (dapps).
Decentralized finance is expected to be the way forward in 2020 owing to the wide-ranging benefits it offers. DeFi is a natural breeding ground that has allowed innovation to flourish and decentralized finance ventures have reached the value of $650 million. Even though it would never have been believed just a couple of years ago, stable and trustless financial services laws have started to introduce new margin trading and lending facilities, enabling traders to easily switch between various debt positions. Through holding cryptocurrencies as leverage, Babel Finance and other market players are also assisting large-time miners in making use of major capital.
The Arrival of Ethereum 2.0
Phase 0 of Ethereum 2.0 has now reached its final testing phase and the public launch of its multi-client test-nest. The teams which led the creation of the components and clients listened carefully to community feedback and received frequent and active updates on developments. As a result, confidence in the Etherum blockchain has grown, and this could result in at least a partial launch during 2020.
More Crypto Derivatives
Recently, crypto-derivatives have grown significantly in both accessibility and scale. Not so long ago, they were offered only by a few exchanges but now most allow investors to trade in options and futures for large-cap cryptocurrencies. As a result, the market will become much more competitive with more exchanges jumping into the picture during 2020.
The Lightning Network
The Lightning network is a platform for crypto-traders (although in disguise). This layer-2 payment protocol applied on all blockchain-based currencies paves the way for instant Bitcoin settlements. Furthermore, this protocol uses off-chain data to catalyze transaction rates and to reduce the associated charges. Further platforms, applications and nodes are expected to be installed on the lightning network infrastructure over 2020, offering even greater market performance.
New Crypto-Friendly Regulations
Over the past two years, no fewer than 13 regulations on cryptocurrency and blockchain have been passed by one U.S. state (Wyoming). This has contributed to the sparsely populated state of America becoming an unexpected global hotspot for cryptocurrency organizations. Wyoming’s new regulations are digital banking friendly and split digital assets into three separate categories. It is unsurprising that other regulatory bodies and U.S. states followed suit rapidly and it is highly likely that more authorities will hop on this bandwagon by 2020.
It is clear that 2020 will be crucial for the development of cryptocurrencies and blockchains. Most experts believe that 2020 will have a secular bull market, as the era of consolidation seems to be fading out. Online assets are already a strong force, and finding out how this year will play out is sure to be very interesting.