2020 is becoming quite significant for the crypto industry. Bitcoin halving, the possible launch of the Libra stablecoin and other events can significantly change the situation in the digital asset market.
Bitcoin halving
Bitcoin Halving is an important event for traders that will happen in May 2020. As a result of the next halving, the miners’ reward will be halved and experts disagree on how this will affect the value of the cryptocurrency and with what time lag.
This event has already occurred twice and has led to quite interesting price movements in the market. In 2012, the value of military-technical cooperation during the year increased from $ 10 to more than $ 1000, and then collapsed almost four times. However, after the second halving in 2016, the price of the first cryptocurrency not only returned to its previous level, but increased 2.5 times, reaching $ 2525 by July 2017.
At first glance, a double reduction in remuneration contributes to a new deficit in the market. Many traders expect the same BTC cost to take off as it did after the previous two halvings. However, don’t forget that to increase the price, the corresponding demand for cryptocurrency is needed.
Halving was created to control bitcoin emissions and curb inflation. It is assumed that after mining the entire number of coins, BTC will become even more valuable than gold.
The transition of bitcoins to digital gold
Bitcoin has been called new gold for years. Everything went so far that even Brad Sherman, the US Congressman, said that a crypto coin could well pose a threat to the dollar in the global economy.
At the beginning of the year, the similarities between fluctuations in Bitcoin and gold prices amid tensions between Iran and the United States did not go unnoticed. However, long-term measurements of the correlation between BTC and gold still indicate a weak correlation between them.
Lightning Network and the adoption of Liquid Sidechain
The Lightning Network is very popular, so it’s quite possible that in 2020 Liquid will be in the spotlight. Due to the high degree of centralization of BTC transactions around platforms, Liquid can also help reduce base congestion.
There is also the option that when the demand for block space remains unchanged, none of these secondary levels of the protocol of the first cryptocurrency will see a big change in growth this year, since the incentive to change old habits is much weaker.
According to Bitcoin technologists, innovations such as Lightning Network and side chains can lead to lower prices for alternative crypto. It should be noted that the altcoin market compared to the BTC in recent years has fallen quite strongly.
Taproot, Schnorr, and Tapscript
Taproot, Schnorr and Tapscript are expected to be included in the same soft update of the BTC network. A final proposal to activate this may be ready later this year. Developers are now considering the code associated with these potential changes that will improve the functionality of smart contracts, the privacy and overall scalability of the first digital coin network.
Institutional money
According to Grayscale, there was an influx of new investors in the amount of $ 600 million, most of them were from hedge funds. A survey in early 2020 also showed that financial advisors could increase the exposure of their users’ assets to BTC and other crypto this year.
