Entering the new decade, you are probably wondering where the crypto industry is headed, and what to expect in the coming year. Therefore, we decided to gather our thoughts and share them with you. Below you can find key trends and what we believe will be the event that will play an important role in the industry as a whole.
There is an Ethereum upgrade that has the promise of staking and sharding, and there is a new virtual machine targeted for 2020. While there are many skeptics around this action, we will definitely see at least some improvements on the Ethereum blockchain. The main reason we believe this is true is the fact that the upgrade is broken down into seven phases. No matter the scope of the upgrade, there is definitely gonna be some buzz around Ethereum in 2020.
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DeFi (Decentralized Finance)
Decentralized finance was a buzz word in 2019 for good reason. The DeFi space rapidly evolved, and the value locked on DeFi platforms like Maker and Compound keeps increasing, according to the DeFi Puls. We don’t see this slowing down anytime soon, and so we believe this will be one of the key trends of 2020. We expect new players to join the DeFi movement and the growing user base of those platforms. This will result in the increased value being locked, and most probably some innovation that will separate platforms from one another.
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With the development of the cryptocurrency industry, institutional adoption started to take place.
As stated by Brian Armstrong, the CEO of Coinbase in his recent blog post, hundreds have joined Coinbase Custody in the past 18 months. This proves that financial institutions are slowly but surely starting to adopt this rapidly growing asset class. With improved regulation, the adoption will become even faster, and we can expect rapid growth to continue in 2020, with larger and larger institutions coming on board.
Another factor proving that there is increasing demand for crypto assets among institutional investors is also the fact that more and more players from traditional finance started to join the party.
Good examples proving institutional adoption are Fidelity Digital Assets and Bakkt, which is an exchange owned by the Intercontinental Exchange (ICE), which also owns the New York Stock Exchange. Last but not least, we believe that in 2020, the first banks will also start to offer crypto-related services.
Mergers & Acquisitions
We expect institutional adoption to result in numerous mergers and acquisitions of crypto companies. Big financial institutions entering the market won’t waste their time developing crypto-related solutions and will most probably rather acquire crypto startups. We have already seen the first mergers and acquisitions happen this year, and we can expect many more in the coming months.
Drum Roll please . . . Bitcoin Halving
Last but not least, ‘Bitcoin Halving’ is an important event for Bitcoin and the entire cryptocurrency industry.
It’s an event that halves the rate at which new bitcoins are created, or in other words, an event that cuts the bitcoin mining rewards in half. It happens in intervals of 210,000 blocks or roughly every four years. The next one is expected on May 14th, 2020 and is the reason why the debates around it are intensifying as we slowly approach it.
Since the previous Bitcoin halvings have triggered the rising prices of BTC (a crypto bull run), everyone is expecting the same after the next one.
Will it happen, no one knows, but what is for sure is that an exciting six months are ahead of us. Therefore, we view this as an important event for the Bitcoin and crypto industry as a whole. You can find more detailed information in our blog “Why is Bitcoin halving important for crypto investors.”