By acknowledging the increasing demand from institutional investors towards the cryptocurrency field and its historic price performances, investing in the digital asset sector could indeed be profitable in 2020 as it was in previous years.
Vienna, Austria – July 16, 2020 /MarketersMedia/ —
In May 2020, Silicon Valley VC Andreessen Horowitz released a report detailing the three phases of crypto development thus far.According to the document, the virtual currency phenomenon, which is well over a decade old, is approaching its fourth epoch.
Certain developments have defined each phase of the crypto journey thus far.The first cycle, deeply rooted in the cypherpunk ethos, saw the emergence of the first infrastructure such as mining pools and crypto exchanges.By stage two, the infant crypto space got pulled into the dark web with the rise of Silk Road.
When the third age rolled came into existence in 2017, Initial Coin Offerings (ICOs) were its major attraction.
Indeed, the emerging global appeal of cryptos saw ICO-mania lead to the funding of thousands of projects, many of which have failed to live up to their hype.Nonetheless, this has given a taste of real distributed, meritocratic crowdfunding.
With 2020 at the mid-way stage, it is perhaps important to consider what the next few years of crypto development will bring.The following are some of the emerging narratives that may form the highlights of the fourth cryptocurrency epoch.
Bitcoin as Hard Money
Satoshi Nakamoto — the pseudonymous Bitcoin creator — characterized Bitcoin as a peer-to-peer electronic cash system.
According to the 2008 white paper, Bitcoin was to be an alternative to centralized payment systems that required third-party intermediaries.
Nakamoto baked a supply cap of 21M tokens into the Bitcoin protocol, effectively making Bitcoin a hard asset.
It assumes a natural position against the dovish monetary policies of governments with infinite quantitative easing inevitably leading to inflation.
The onset of the COVID-19 pandemic appears to have exacerbated the issue with governments forced into what hedge fund manager Ray Dalio defines as “Big Debt Cycle”.
As a haven asset, Bitcoin ought to behave differently than the stock market.However, Bitcoin appears highly correlated with U.S.stocks at least for most of 2020.
Amid the panic of “Black Thursday” of March 2020, both stocks and Bitcoin experienced massive price declines.The recovery after was similarly following the same.
Historically, we have already experienced this move of stocks and stores of value assets like precious metals in tandem during inflationary market conditions.
In the 1920s, during the hyperinflation crisis of the Weimar Republic, gold prices and stocks soared together.
When central banks print more money, investors use the liquidity influx to buy up more stocks in lack of alternatives.When COVID-19 stimulus payment went out in the U.S.back in April, crypto exchange Coinbase reported a surge in Bitcoin purchases valued at $1,200, the exact sum of the payment sent out by the government.
While retail trading is undoubtedly on the rise, institutional money is still flowing into the crypto space.
Cryptocurrency funds like the Grayscale Bitcoin Trust are constantly increasing their positions.
Back in April, the legendary hedge fund Renaissance Technologies founded by Jim Simons, acknowledged adding cash-settled Bitcoin futures to its trading portfolio.
BTCS Inc.— one of first U.S.publicly traded companies (ticker: BTCS ) focused on digital assets and blockchain technologies— saw also rising demand from institutional investors.
Charles Allen, BTCS’ CEO tells me: “We are seeing more institutional interest, even more so given the unprecedented fiscal and monetary global stimulus during the Coronavirus crisis.”
Bitcoin Ban and DEX Supremacy
According to former National Security Adviser John Bolton, President Donald Trump wanted to go after Bitcoin back in 2018.
Indeed, President Trump’s remarks about cryptos have been negative, tweeting in July 2019 that he was not a fan of virtual currencies.The U.S.
President espoused the common anti-cryptocurrency rhetoric of drug trafficking and illegal activities being ascribed to virtual currencies.
While Congress is considering a couple of crypto-related bills, the crypto regulatory framework in the U.S.is still a patchwork of State and Federal laws.There is an extreme yet unlikely possibility of a total Bitcoin ban akin to Executive Order 6102 that prohibited gold ownership for Americans back in 1933.
In theory, such a move would see U.S.crypto exchanges like Coinbase preventing Americans from accessing their crypto deposits.Given the borderless nature of cryptos, a Bitcoin ban in the U.S.
may do little to affect “Bitcoiners” in other countries.It may not even affect the price negatively.Gold’s price, after all, held steady during its prohibition, and so do many illegal goods.
Today, we see decentralized exchanges (DEX) becoming more widely used as they possess greater censorship resistance than their centralized counterparts.
DEX platforms like Uniswap, 50x or Bisq see increased trading volumes as traders look for alternatives to centralized exchanges.DEX platform 50x even advertises “no KYC” and “no account verification”.
In June 2020, DEX monthly trading volumes crossed $1.5B; an all-time high.
Decentralized Finance
Decentralized Finance (DeFi), leveraging decentralized networks to transform old financial products into trustless and transparent protocols that run without intermediaries, is one of the crypto trends of 2020.
Smart contracts for savings, loans, trading, insurance and more enable a world of finance without institutions.
DeFi is crypto’s extension of the Austrian Economics ethos of minimal government control.Rather than having central banks and other financial institutions calling the shots, protocols running on smart contracts define the governance for markets like lending and derivatives trading.
Compound (COMP) and Maker (MKR) are the two largest protocols based on the total Ethereum value locked (TVL).Both projects are lending market.
Staking & Yield Farming
In Bitcoin, miners contribute computing power to secure the network in the consensus mechanism known as Proof of Work.
In Proof of Stake, locked-up tokens, instead of hashing power, become the means by which a blockchain is secured.Miners lock up tokens on the network in expectation of being randomly selected to validate transaction blocks.Where Proof of Work mining requires hardware like ASICs or GPUs, staking relies on the volume of coins held in a “staking wallet.” Thus, the more tokens locked up, the higher the chances of “winning” the next block in the network.
To combat inflation on some Proof of Stake networks, staking rewards follow a fixed percentage regime.
Other blockchains follow a probabilistic block reward paradigm based on factors like the number of coins locked-up and the length of the staking period.
Tokens like Fantom (FTM), Fusion (FSN), and Kyber Network (KNC) are among some of the top staking coins in terms of reward.Fantom offers about 34% in staking reward while Fusion and Kyber Network provide 21% and 10% respectively.Tezos (XTZ) is the largest Proof of Stake network by market capitalization — $1.8B — with 80% of its 735.9M XTZ total supply locked-up in staking wallets.
Networks like Ethereum and Cardano (ADA) are moving closer to staking.
Liquidity mining, also known as yield farming, is the automation of the hunt for the biggest yields among different staking protocols.StakerDAO, a startup founded by longtime Tezos investor and serial entrepreneur Jonas Lamis, introduced the BLEND token to track a transparent, algorithmically managed basket of Proof of Stake assets.
Conclusion
DeFi growth and Bitcoin’s status as hard money are appearing to be the leading narratives in the current crypto epoch.DEX platforms are beginning to see greater utilization with centralized exchanges facing government censorship.
Given the current political and economic climate, crypto could gain further credence as a hedge against currency debasement and uncertainties in the global financial markets – while being resistant to government interference.
Contact Info:
Name: Rafael Vieira
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Organization: cryptocoin.news
Website: http://cryptocoin.news
Source URL: https://marketersmedia.com/how-to-popular-your-project-in-2020/88967787
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