I recently shared my 2020 predictions for the crypto market. Below are five takeaways from my ‘Bitcoin & Cryptocurrency Industry 2020 Forecast & Predictions’ video. (Don’t know who I am? My name’s Alex, the founder here at Nugget’s News.)
#1 — Year of the DEX
Decentralised exchanges (DEXes)—or, non-custodial exchanges—appear primed for a big 2020. Over the past 12 months, DEXes have become a lot more liquid and user-friendly. All this at a time when hackers continued to have great success breaching centralised exchanges’ security, resulting in the thieving of user data and hundreds of millions worth of cryptocurrencies.
In particular, expect the size of liquidity pools on Uniswap—the second version of which is launching imminently—to continue growing strongly throughout 2020. (Uniswap is a decentralised on-chain protocol for token exchange on Ethereum that uses liquidity pools instead of order books.)
Top DEX Tracker—Etherscan (Jan. 27, 2020)
#2 — More Privacy, More Regulatory Scrutiny
In 2020, the Bitcoin and Ethereum blockchain networks will each make significant progress with regards to privacy. For Bitcoin, this will come largely thanks to the introduction of Schnorr signatures and Taproot. And for Ethereum, solutions employing zero-knowledge proofs will continue going live.
With each Bitcoin and Ethereum privacy upgrade, expect the expressed discontent of governments and law enforcement agencies to escalate. As any full-time industry participant will tell you, this is a conflict that’s been simmering for years. 2020 may very well be the year it comes to a head.
#3 — Bitcoin ETF Wait to Continue
Whilst it’s true that a significant amount of progress has been made with respect to bringing a bitcoin exchange-traded fund (ETF) to market, there remains plenty of work to be done to convince the U.S. Securities and Exchange Commission (SEC) that the bitcoin market is uniquely resistant to manipulation.
Also, there is also a somewhat persuasive argument that a bitcoin ETF application won’t be approved whilst SEC chairman Jay Clayton is at the helm. There are bound to be certain pockets of the Bitcoin community that have already circled the date June 5, 2021, in their calendar. That is when Clayton’s term will end.
#4 — Here Come the Central Bank Digital Currencies (CBDCs)
Expect CBDCs to frequent the headlines throughout 2020, particularly China’s so-called digital currency electronic payment (DCEP), which is reportedly slated to launch this year.
Although fundamentally very different to cryptocurrencies like bitcoin, CBDCs will continue to generate plenty of conversation, especially among those who express concern with the global trend toward digitising money.
#5 — Make or Break for Ethereum Competitors
A number of well-funded, high-profile teams are set to launch their respective layer-one blockchains this year, including NEAR (NEAR) and Solana (SOL). With the full launch of Ethereum 2.0 likely at least two years away, the interim represents an ideal opportunity for these soon-to-launch chains to attract developers and users.
For blockchain networks that went live in 2019 to much anticipation, the year ahead looms as make or break. If by December 31, 2020, the likes of Algorand (ALGO) and Hedera Hashgraph (HBAR) remain without any considerable usage, doubts over their long-term viability will be incredibly hard to ignore.
Below, I discuss the above five points plus the other areas I’ll be monitoring throughout 2020. These include decentralised finance (DeFi), non-fungible tokens (NFTs), and blockchain-enabled decentralised compute storage.
Want to listen instead? Find the audio version on your favourite podcast streaming app by subscribing to ‘Nugget’s News Crypto Podcast’.
Also, be sure to read ‘3 Surprising Lesson From Crypto in 2019‘ to ensure you’re across all the current issues and trends in crypto.
Join over 6,500 subscribers in receiving free analyses every week on cryptocurrencies, financial markets and macroeconomic events by subscribing to our free mailing list.