This year will be a year to forget for the majority of cryptocurrencies. In 2020, however, this is likely to change fundamentally – for these reasons.
A better future for cryptocurrencies
Total crypto market cap is currently 50% higher than last year, and that’s largely Bitcoin’s work. Most altcoins are actually traded lower than in early 2019, which is why the year is more of a zero round for many of their investors.
However, there are several factors that could lead to revival and new highs in 2020. Economic worries are growing and central banks are taking ever more extreme measures to avoid a recession.
Negative interest rates and quantitative easing are putting massive pressure on financial markets, and Fiat is threatened with devaluation. Several countries are already suffering from massive hyperinflation – and people have turned to cryptocurrencies as a safe haven.
Since typical assets are no longer considered lucrative, investors can turn to riskier ones like Bitcoin. In addition, stocks and real estate are at all-time highs as global debt skyrockets. Millennials don’t want to be left behind either and are turning to cryptocurrencies, as industry analysts observe.
The US election could also play a role – because President Trump will do everything to keep the stock markets going while negatively impacting global trade agreements in the name of protectionism.
The potential impact of Bitcoin’s halving shouldn’t be ignored either – and it’s likely that a rally will occur after the event. The drop in inflation and the doubling of the stock-to-flow ratio are optimistic for Bitcoin, although there could be some negative impacts on mining profitability.
With the switch to proof-of-stake, Ethereum will undergo an upgrade of the network, which will open up new investment opportunities. Other tokens with staking functions have performed well this year, so ETH could get the market moving when Serenity finally sees the light of day.
There is currently a lot of pessimism in the crypto industry as addiction trends decline and interest generally declines. After all, most cryptocurrencies are still 90% from their peaks and have no liquidity whatsoever. A new year could shuffle the cards since two years have passed since the last bubble.
Institutional interest is steadily increasing, and while products like futures are not necessarily price inflation, they do raise awareness and acceptance among those who dig deep.
2019 was not the best year for cryptocurrencies. Most of them wiped out all profits. Only Bitcoin and a handful of others have survived – but the prospects for 2020 are all around better.