It’s probably not a huge stretch to say that 2020 has been an eventful year. With its great impact on the pages of history books, it also has been one of the busiest years in the world of crypto.
Finding it hard to remember what you had for breakfast this morning, let alone what happened in this hectic year? No worries, we’ve collected some of the most significant crypto events for you in this article!
“Black Thursday” COVID-19 crash
The global spread of the coronavirus and the following lockdowns have undoubtedly been the most significant event of 2020. Just about every financial market in the world has experienced unprecedented volatility and extraordinary market crashes
thanks to this black swan event
While Bitcoin held up relatively well for a while, its inevitable doom followed on 12 March 2020 – a day probably not many crypto HODLers
Bitcoin crashed 50% in a span of a little more than a day thanks to the outright panic in financial markets.
Bitcoin’s crash during the initial COVID-19 shock.
The good news is, Bitcoin broke ATH not even nine months later! The 2020 crypto market has forged some true survivors.
2020 Bitcoin halving
The Bitcoin halving was probably the most unexpected event of 2020, shocking everyone in the crypto world. Just kidding, the Bitcoin halvings are a known event that takes place every 210,000 blocks
, which amounts to roughly four years.
As part of Bitcoin’s issuance schedule, miners are rewarded whenever a new block is produced. Bitcoin halvings are when the reward miners get is reduced in half. If you’d like to know more about how this process works, check out our overview of Bitcoin mining
Even though this is a known event, it’s a great celebration of Satoshi’s
creation and Bitcoin’s ingenious design. This latest Bitcoin halving occurred on 11 May 2020. Since then, miners have been receiving 6.25 BTC per block instead of 12.5 BTC per block.
“DeFi summer” and yield farming
It’s not a stretch to say that Decentralized Finance (DeFi)
has seen an explosion of interest in 2020. Many now refer to the summer of 2020 as “DeFi summer”.
Some attribute the start of this boom to Compound Finance’s
liquidity mining campaign. A few weeks passed, and voilá, we’ve had the birth of yield farming
! Endless farming opportunities, food coin forks, frenzied clicking in various MetaMask
tabs, as well as many exploits and outright scams
. These were all common during the DeFi summer of 2020.
However, despite the somewhat whimsical appearance, DeFi is clearly here to stay. Automated market makers (AMM)
such as Uniswap
are printing hundreds of millions of dollars of trading volume every day. Check out how much DEX volume has exploded this year.
Meanwhile, decentralized lending protocols like Aave
and Compound have billions locked in their contracts, and yield aggregators like yearn
are working on new yield-generating vaults.
One of the fast-changing segments of crypto, DeFi certainly has a bright future ahead for 2021 and beyond.
Bitcoin’s institutional adoption
In case you haven’t noticed, the “institutions are coming” meme became a reality this year!
Bitcoin in the treasuries of publicly traded companies has skyrocketed. Just one company, MicroStrategy, has purchased more than 70,000 BTC, worth more than $1.8 billion as of December 2020. It’s likely that this trend of Bitcoin being viewed as a legitimate macro asset that large institutions can allocate some of their capital to will only continue.
Oh, and in case you didn’t know, MicroStrategy CEO Michael Saylor also reads Binance Academy! Don’t believe it? Check out his interview
with CZ, Binance’s CEO.
Ethereum 2.0 launch
has been a long time coming. It’s a set of upgrades to the leading smart contract platform that are supposed to roll out over the next few years. Most notably, these include a move from Proof of Work (PoW)
to Proof of Stake (PoS)
, sharding, and many other upgrades to improve the network’s scalability.
This upgrade is rolled out in many phases. Phase 0, the launch of the beacon chain, and the start of staking launched this year. As of December 2020, the Eth2 deposit contract has more than $1 billion worth of ETH locked into it, showing significant interest in Eth2 staking.
If you’d like to stake your ETH without worrying about the technical details, check out Binance’s ETH2.0 staking
With the upcoming Eth2 upgrades, Layer 2 solutions, such as Optimistic rollups, and EIP-1559, which is supposed to overhaul the current gas
system, Ethereum has quite the journey ahead.
Bitcoin hits All-Time High (ATH)
It’s not a big secret that despite the tremendous bad the coronavirus has caused for the world, it likely accelerated crypto adoption. There’s an increased public interest in economic policies, the concept of sound money, as well as remote work, and our economic activity being transferred to the digital realm. These processes have been going on for a while, but in 2020, the pandemic forced their acceleration.
It’s likely that this has strengthened the case of Bitcoin as a store of value
, digital gold, or simply just sound money. Whatever narrative we attribute to the price action, Bitcoin broke its previous ATH on 30 November 2020. Then, after a brief pullback, it flew through the level, not even taking a breather until many thousands of dollars further up.
Where will the next market top be? It’s anyone’s guess, but we know that Bitcoin enters a new phase of price discovery in 2021.
Well, what else can we say that hasn’t been said about 2020. It’s had its ups and downs, but hopefully, 2021 will be a tiny bit easier for all of us! We’ll surely be here, building the future of value transfer on the Internet.
We’re happy that you’ve been reading Binance Academy in 2020, and see you in 2021!