From its creation in 2008, Bitcoin has been growing with no sign of stopping or going down, so let’s have a look at some of its market trends.
Fast forward to 2019, and Bitcoin could be seen tallying a significant price gain only to go through a steep decline later the same year. Now with the fresh start of the crypto market in 2020, Bitcoin being its largest asset showed similar price gains as last year, only to make people wonder if the same downfall is waiting as the year unwraps.
However, much to the excitement of crypto-enthusiasts, Bitcoin seems to hint at a more sustainable pace this year than the last one. Staying up to date with the relevant trends that have shaped the market and stabilized the Bitcoin prices, clearly show a more smooth sailing in the Bitcoin market for 2020.
Top Trends That Have Help Sustain Bitcoin in 2020
The following are some of the major trends that have to unfold up until now in 2020 to help sustain the Bitcoin market.
The ETF Approval
An ETF or Exchange Trade Fund is an investment fund made in stock exchanges similar to stocks. It can hold stocks, commodities, and even bonds but have an arbitrage mechanism to avoid deviation from the net asset value. For crypto-enthusiasts and investors looking to capitalize on the surge of Bitcoin, an ETF that tracks Bitcoin is the best opportunity to make a successful connection.
The ETF would act as an investment vehicle to track the performance of Bitcoin. It will mimic the current prices of the most popular cryptocurrency of the world so that investors can tap into the ETF without going through the direct trading complications of Bitcoin.
Unfortunately, the approval really didn’t come through, even this time. The Bitcoin ETF from Bitwise Asset Management experienced a very close call to being approved by the SEC in 2019. However, it was again rejected due to the concerns surrounding potential financial manipulation and fraud. There is a 60% chance that the years-long battle will be receiving a full SEC approval this year.
The Scheduled Occurrence
The sudden resurgence of Bitcoin in May 2020 is nothing new. It is one of the key growth aspects in the life of the popular cryptocurrency. It is much of a scheduled occurrence that has taken place every four years.
Mainly after a much-coveted period of growth and price drop, there comes a time when the number of every new Bitcoin generated in the next 10 minutes is cut in half. Therefore, supposedly if there had to be 12.5 Bitcoins included in the subsidy for the miners, half of the total, which is 6.25, will be generated instead.
Miners and investors have a difference of opinion as to how this occurrence this year is going to affect the Bitcoin price. They are mainly divided if the effect is yet to show or is already present in the market. However, the point to be noted here is that either way, the past records show that it will all work out for good.
If we take a look at the past scheduled occurrences that have been twice in the life of this crypto-asset, it brought a significant appreciation for the price changes that followed for the rest of the remaining months. Also proclaimed as ‘The Halving’, industry executives predict a $50,000 priced Bitcoin by the time 2020 wraps up.
Bitcoin as the Digital Gold
Bitcoin has been referred to as the digital gold ever since the masses could understand the magnitude of its value and the change it was brewing for the market. However, at the start of the year 2020, Bitcoin actually lived up to its label.
According to the cryptocurrency data accumulated from the last six months, Bitcoin prices responded to the tensions between the US and Iran, like how gold prices reacted to such news.
Even if there is no real connection between the two assets, Bitcoin became more correlated to gold than any other cryptocurrency ever could and went on to show that it really is capable of becoming gold in reality.
The idea was discussed worldwide so much that a US Congressman claimed that crypto might pose a threat to the growing US dollar due to its dominant and prevalent nature in the global economy.
The case of Bitcoin coveted as digital gold has become so popular that it is often referred to as the core value proposition of the popular crypto asset that is Bitcoin.
The whole idea is that the greater the correlation between the two assets, the easier it will become for the masses to understand how valuable Bitcoin can be, and this will eventually increase its acceptance.
The 2020 Upgrade
Unlike other alternate cryptocurrencies out there, Bitcoin does not believe in serious, consistent upgrades for good reasons. With that being said, a major change has been called for this year. Schnorr, Taproot, and Tapscript are expected to be integrated into the one main soft fork of the Bitcoin blockchain network.
A soft fork is a change in the software protocol of blockchain technology. It invalidates the previously valid transactions as the old nodes are made to recognize the new blocks as valid thus, making soft fork backward compatible. The update will be seeing the light of day sooner this year.
Adopting Lightning Network or Liquid Sidechain for the Spotlight
More developments are on the way as we speak. These will be made upon layers above the base of the Bitcoin protocols. For many years now, the Lightning Network has been discussed as a potential solution to make faster and cheaper Bitcoin micropayments.
However, the Lightning Network might have enjoyed hype up until this point. As of 2020, the spotlight has been shifted to Liquid Sidechain with a much higher potential of being deployed. As the amount of Bitcoin transactions being centralized increases, Liquid is seen as potentially helpful in lowering the hurdles caused at the base of the Bitcoin blockchain.
The final Bitcoin trend that the enthusiasts are looking forward to in 2020 is the adoption of the cryptocurrency by institutional investors. Similar to the innovations discussed above, even this trend has been widely discussed and hyped for over the years.
But understandably, something of this magnitude does not happen overnight. As hedge funds grow and financial advisors push the exposure of their clients’ assets towards Bitcoin, there is a high chance Bitcoin becomes a centralized digital currency.
All in all, more changes can be expected as we still have a few months to go. However, these trends have definitely set the right pace for the market, which looks way more promising and sustainable this year.
The irony of the situation to transcend is that all this and much more awaits for a mega crypto asset that was deemed dead 41 times just last year!
Samantha Kaylee is currently working as an Assistant Editor at Dissertation Assistance, an excellent platform to get custom essay writing service. She is a passionate crypto-enthusiast who enjoys new, emerging technologies. She likes to share her interest and opinions in this regard through blogs.