Why 2020 Will Be the Year Cryptocurrency Reaches a New All-Time High

This year will go down as one to forget for most cryptocurrencies, but 2020 could be fundamentally different for the crypto market, and here’s why.

The total cryptocurrency market cap is currently 50% higher than it was this time last year, but this is largely a performance by Bitcoin. In fact, most cryptocurrencies are trading below where they were at the start of 2019, and for many, this will be a year to forget.

However, several factors could drive a cryptocurrency recovery in 2020 and even new highs.

Concerns about the economy have been growing this year, and central banks are taking more extreme measures to avoid a recession.

Negative interest rates and quantitative easing are putting tremendous pressure on financial markets, and fiat currencies are facing the threat of devaluation. Some countries have suffered from severe hyperinflation, so some people have turned to cryptocurrencies as a safe haven asset.

As asset values ​​distort, investors may turn to riskier assets, such as Bitcoin. In addition, stocks and real estate have also hit record highs, but global debt has surged. Millennials will not want to be caught up in possible financial problems, so they may also turn to cryptocurrencies, as many industry analysts have observed.

Additionally, the US election may also come into play as President Trump will do whatever it takes to keep the stock market high, but at the same time will have a negative impact on global trade agreements in the name of protectionism.

It is worth noting that the Bitcoin halving story cannot be ignored, and a sharp rally is likely to follow the event. The reduction in inflation and the doubling of the flow ratio are both bullish for Bitcoin, but may also have a negative impact on the profitability of Bitcoin mining.

Ethereum is going through the early stages of the main consensus and is converting to a proof-of-stake mechanism through a network upgrade, which will also bring new investment opportunities. Other cryptocurrencies with staking options have performed well this year, so when Serenity (Ethereum's new protocol) finally starts to become a reality, ETH may drive market momentum.

With most cryptocurrencies still down 90% from their peaks and without much liquidity, there is a lot of pessimism in the crypto space right now, with overall search trends down and interest generally declining. Two years have passed since the last bubble (the big bull run in 2017), and a new year may be able to liven things up.

At the same time, institutional interest in cryptocurrencies has been growing since 2019, and while products such as futures do not necessarily boost prices, they allow those with deep pockets to enter the cryptocurrency industry, greatly increasing its visibility and adoption.

Overall, 2019 was not the greatest year for cryptocurrencies, with most giving up all the gains they had made. Only Bitcoin and a few other cryptocurrencies were able to escape the blow, but current conditions suggest that the outlook for 2020 seems to be brighter.

The original article comes from bitcoinist and was translated by the Bluemountain Labs team. The English copyright belongs to the original author. Please contact the translator for Chinese reprint.