Inventory: Five major events that promoted the popularity of cryptocurrencies in 2020

Original title: "Inventory: Events that drove historic adoption of cryptocurrency in 2020"

We’ve had a lot of ups and downs in the past year, mainly due to the global coronavirus outbreak that paralyzed countries and killed millions of people. But for those in the cryptocurrency and blockchain community, 2020 has finally shown the true potential of blockchain technology.

Arguably, 2020 has done more to have a lasting positive impact on the crypto industry than the development of distributed ledger technology and Bitcoin (BTC). So, here are five major developments in the decentralized technology space in 2020 that will have a lasting and profound impact on the crypto industry in the years ahead.

Bitcoin price breaks through $20,000

In addition to breaking the all-time high price of $20,000 during the bull run from 2017 to 2018, Bitcoin has done more. First, it broke through the $20,000 mark. Not long after, it broke through $30,000. And now, it has even broken through the $35,000 mark.

Seemingly crazy predictions like Bitcoin’s price reaching $45,000 by the end of 2021 may not be far away. More importantly, the famous pricing model S2F (stock-to-flow) created by cryptocurrency analyst PlanB shows that the prediction that Bitcoin’s price will reach $100,000 is coming true.

The price of Bitcoin is going up, but it could also go down. It has happened before and it could happen again. However, in theory, a lot has changed, especially the general perception of Bitcoin. This is evidenced by the shift in demand from retail investors to institutional investors.

Bitcoin has attracted many well-known companies that have entered the Bitcoin market for different reasons, from companies that choose to hold Bitcoin as a reserve asset, such as Microstrategy, to crypto investment funds, such as Bitwise and Grayscale. We don’t know which individuals are investing through these funds, but we know that they are willing to invest billions of dollars in cryptocurrencies. At the end of October, the real big news appeared.

PayPal launches cryptocurrency payment service

PayPal was founded on a similar philosophy to Bitcoin itself, and the company not only announced its entry into crypto, but actually entered the space in 2020, at least in the U.S. Moreover, PayPal is now reportedly one of the largest buyers of Bitcoin as the company is increasing its Bitcoin reserves to meet customer demand.

The word that sums up this development is "adoption." Some 28 million merchants and more than 361 million users worldwide will now have access to "primary services" for holding and using cryptocurrencies. PayPal describes itself as acting as a custodian, essentially just selling its Bitcoin holdings. It's good that PayPal does this without following the traditional way of holding cryptocurrencies.

Cryptocurrency can be very difficult for the average user to understand, with all the cold and hot wallets, passwords, 12-word recovery phrases, etc. PayPal offers an easy and accessible way to get into crypto, and once that happens, some people may explore how to use the technology in its entirety.

Bitcoin Halving

The Bitcoin halving is considered a make-or-break moment for the crypto industry. Bitcoin did halve, but not a whole lot actually happened. Many commentators expected BTC’s price to surge and then crash, while others predicted a drop in the Bitcoin network hashrate. While these things did happen to some extent, it was far less dramatic than expected, which is a very good thing.

The Bitcoin mining reward halving occurs approximately every four years and is when the Bitcoin reward miners receive for mining a block is halved. This is a hard rule encoded in the Bitcoin blockchain that limits the supply of Bitcoin to 21 million, mimicking the limited supply property of gold.

Ultimately, the fact that Bitcoin’s price and fundamentals have barely been affected has led some to believe that Bitcoin has reached a certain level of maturity. Perhaps it is this resilience that is finally causing some of the largest companies, economists, and investors to reconsider their views on cryptocurrencies in general. As 2020 has passed, the fact that Bitcoin’s supply is depleting has become more apparent.

Coinbase files for IPO

Public listings are all the rage right now, so it’s great to see crypto-native companies like Coinbase jumping in. Half expect Coinbase’s IPO application to be approved soon, as the company has adopted a full-blown open-door approach to appease U.S. regulators when the market is ripe.

Essentially, the move means that traditional investors will be able to invest millions of dollars in Coinbase’s equity, up to $28 billion in fact, according to Messari data. Coinbase also prudently submitted the draft listing at a time when the prices of top cryptocurrencies are rising, which is likely to work in Coinbase’s favor as the exchange will undoubtedly face heavy scrutiny from the U.S. Securities and Exchange Commission (SEC).

Ultimately, Coinbase could lead the way to widespread cryptocurrency adoption among investors and users. Other so-called unicorns could follow the exchange’s lead in 2021, so in a way, Coinbase’s filing for an IPO is risky. But if Coinbase gets the go-ahead for an IPO and becomes the first truly large cryptocurrency company, it could pay off.

Ethereum and DeFi

Bitcoin has investors, Ethereum has users, and Ethereum has stepped up its pace in 2020 to make the boom in decentralized finance a reality, finding use cases for all the decentralized applications that were once considered to be game-changing for a while.

Everything was quiet until July, when the much-anticipated project Compound announced the launch of its own token, COMP. COMP quickly proved to be a success, being listed on several well-known exchanges and creating a new trend in DeFi.

The basic approach behind Compound is simple: the platform acts as a decentralized lending protocol, paying interest to users who provide crypto assets to the liquidity pool. However, once funds are added to the pool, the platform issues an equal amount of cTokens that can be used as collateral for the loan, meaning any type of token can be used twice.

As COMP’s price began to rise, it wasn’t long before other projects followed suit and began launching competing protocols or projects that supported the decentralized ecosystem. A little over a month later, the launch of Yearn.finance took liquidity mining to a whole new level.

Then, decentralized exchange Uniswap also joined the action, opening its own liquidity pool, and due to its open listing policy, countless DeFi projects flocked to Uniswap to list their tokens on the exchange. However, it also made an impact through the use of automated market makers (AMMs), with Bancor launching the first AMM in 2017. 2020 was the year when AMMs really took off, driving users to trade using tokens based on the Ethereum blockchain. This ultimately brought thousands of active users to the Ethereum network.

More importantly, after several lengthy delays, the Ethereum 2.0 upgrade has finally launched. The combination of ETH2.0, the recent renewed interest in alternative coins, and the DeFi craze has undoubtedly revived interest in Ethereum and its token ETH itself, and has pushed ETH prices to their highest level in nearly two years at $1,200, close to their all-time high of around $1,450. Now, at the beginning of 2021, some people have determined that ETH will soon rise to $2,000.

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