Bitcoin recap 2020

ChangeHero continues the series of the 2020 crypto recap! Last week we looked at what was happening with altcoins and altcoin performance in 2020. Before that, we wrote an article about Ethereum and DeFi, the stars of 2020. However, now is finally the time to take a look at what happened to Bitcoin in 2020. Starting with Bitcoin performance, we will also look at the most resounding news and stories of this year.

Bitcoin Performance in 2020

Of course, the 2020 Bitcoin recap should start with a deep dive into the Bitcoin performance this year.

Bitcoin price chart for 2020
Source: CoinMarketCap

Q1: the Spring after Crypto Winter

Bitcoin started the year 2020 in a bullish market. The opening price of BTC on January 1 was $7,198.64. By February 16, it had reached $10k. At that time, bears overtook the initiative and the price entered a slow downtrend again. However, in a month the change took a sharper turn, when WHO declared the global COVID-19 outbreak a pandemic. Stock markets crashed, and so did the crypto market. On March 13, later dubbed “Bloody Friday”, Bitcoin sank to its yearly low of $4,106.98.

Q2: the Halving Recovery

The climb back up was not fast but steady. In April and May, a positive sentiment surrounded Bitcoin in anticipation of halving. Why? There is a section further in the article explaining it. The price even got extremely close to $10k, but was rejected.

This mark was reached in June, although for only a day. This was the first time in a long time that the community saw a “Bart head” pattern (quick surge, brief sideways trading, correction to the level before the surge) on the BTC charts, but certainly not the last. For the most part, June and July did not see much action, and Bitcoin was trading around $9k.

Q3: the Warm-Up

Another bullish phase finally started in late July and August. On July 27, Bitcoin suddenly jumped above $11k. For the entire month of August and early September, BTC consistently stayed this mark and even tested $12k. After the rejection the price came back to slightly above $10 thousand. From there on it was trading mostly sideways in a slight uptrend for a couple of months.

Q4: the Bull Run

The $12 thousand resistance was crushed in October, and from there on things got exciting. $13 thousand was taken in a couple of days, $14 thousand smashed and passed straight to $16 k in early November. A couple of weeks later? Bitcoin is already over $18 thousand. Rejection at $19k in late November? The dip to $16 thousand lasted only for a few days. On November 30th, Bitcoin beat its ATH on several exchanges at $19,749.26.

The first half of December was looking a lot like either the start of the correction or a sideways trend. Bitcoin seemed to be stuck between $19k and $18k until December 16. That day, it shot up right through the psychological barrier of $20 thousand and beat its ATH officially on all exchanges. The current ATH was observed a couple of days later, on December 20, 2020: $24,209.66. At the moment of writing the article, Bitcoin price is $22,789.06. In comparison with the 2020 opening price, Bitcoin performance is positive at 216.57%.

Bitcoin Market Capitalization in 2020

On the same chart we can see that the price correlates with the changes in market capitalization. At the start of 2020, BTC’s market cap was $130,634,632,078 USD, and at the time of writing it is $439,984,211,210 (+236.80%) USD.

Bitcoin Dominance in 2020

Bitcoin market dominance in 2020
Source: CoinMarketCap

Bitcoin’s market dominance (the percentage of BTC’s market cap vs. the total market cap of all cryptocurrencies) has been staying between 56% and 68% for all 2020. It was at its highest in the winter bullish market and its lowest throughout September, when BTC was trading sideways.

2020 Bitcoin Halving

On May 11, 2020, Bitcoin mining rewards were halved for the third time. For adding a block to the blockchain, a miner now gets 6.25 BTC as a reward. The event could have contributed to the ongoing rally of BTC.

Halvings are seen as bullish because these events slow down the issuance of Bitcoin. Previous halvings have also had a similar effect on Bitcoin performance. When the supply is decreasing but the demand stays at the same level, the price of a good or commodity will also increase in the long term.

If you would like to learn more, ChangeHero team made articles about Bitcoin post-halving and a more in-depth analysis of the 2020 Bitcoin halving.

Technical updates

Bitcoin Core 0.20.1

The Bitcoin Core client was updated three times this year. In March and August, there were maintenance releases with minor fixes. The latest major upgrade, Bitcoin Core 0.20.0, was rolled out in July. Among notable changes the developers highlight the removal of reject network messages (to make the network more trustless), remote procedure call (RPCs) and setting updates. In fact, most of the changes made in the release concern builders rather than users and did not make the Bitcoin news.

What users can look forward to is Schnorr signatures (BIP-340) that can enable blind signatures or partially blind atomic swaps. Another large improvement is Taproot, a modification of a multi-sig function that can be used to create sidechains and tokens in the Bitcoin network. It is yet unclear, though, whether these proposals will be finalized next year. However, even the news of progress in that direction will have a positive impact on Bitcoin performance in 2021.

Liquid Sidechain

In May, Blockstream presented a solution to making Bitcoin more mobile in a form of a sidechain — Liquid. As the developers put it, the sidechain can make settlements on the Bitcoin blockchain faster and more private. As a tradeoff, the security model of the sidechain is different: Liquid tokens use federated peg. It is a trusted solution that partially relies on cryptography and consensus.

In Liquid, transaction amounts are confidential, as the unspent outputs instead of exact amounts use cryptographic functions.

Despite all the differences, Liquid is not a fork of Bitcoin but a sidechain, as validation relies on the same ledger. However, the concessions made to the security model and the fact that it is a corporate initiative made Liquid controversial in the community. Right now it is used as a solution by a few exchanges and platforms, but was not yet embraced by the community as a whole.

BTC Adoption in 2020

Bitcoin adoption in 2020 has made huge strides to facilitate entry into crypto. Of course, most notably, PayPal introducing cryptocurrency led the way. This could even drive the 2020 Bitcoin performance, as it was reported that PayPal and Square (the company behind CashApp) were buying all the newly minted BTC in Q4.

Institutional adoption is accelerated by hedge funds and crypto derivatives. Open interest in Bitcoin futures on CME consistently showed record highs. As for the funds, this year, Guggenheim Fund and Renaissance Technologies expressed interest in the crypto market, and famous hedge fund managers expressed their interest in BTC as a store of value.

Mass adoption was not only visible in America. On the markets, such as Nigeria, Vietnam and India, P2P trading volumes were growing all year. This growth was driven by remittances and inflation of local currencies. In the 2020 crypto adoption report, Russia, Ukraine and Venezuela showed the highest degree of crypto adoption by multiple metrics (P2P volumes, on-chain value transfers).

By the end of 2020, cryptocurrencies were the only option left for the largest adult content platform on the Internet, PornHub. This was a consequence of Visa and MasterCard cutting ties with the platform in the light of its negligence in combating sexual abuse, including minors, on the platform. However, thousands of models and sex workers were also impacted by this, especially in the pandemic. Crypto is right now the only way to donate to them and support the platform.

Crypto Regulations in 2020

FATF Travel Rule

The recommendations by the Financial Act Task Force (FATF) now include a ruling that virtual asset service providers (VASPs) should share information with the concerned authorities. The name comes from the analogy with the US bank regulations. According to the recommendation, a VASP in addition to doing due diligence in KYC, should share the information on request from the country of registration’s authorities. The Travel Rule mostly concerns businesses, which is why it went mostly unnoticed by the users. However, it was a step towards making member countries collaborate with VASPs to combat money laundering and terrorism financing.

ChangeHero Articles on Regulations

Earlier this year, our team wrote an article about different local regulations of cryptocurrencies in the world. Half a year later, we researched pro-Bitcoin nations and those who oppose it in an article about regulated cryptocurrency exchanges.

As far as Bitcoin is concerned, the laws have stayed mostly the same as we described in these articles, with the exception of India, which warrants an update for December.

One of the largest markets for crypto, India was a source of conflicting news stories all year round. Early in 2020, the community celebrated Indian Supreme Court lifting what was essentially a ban on cryptocurrencies. There still were some uncertainties about the provision of banking services and the mining industry. Only in December it finally became clear that neither are illegal. India is only a single case, but it shows how the relationship between the government and the nation can affect the local crypto economy.

What to Expect in 2021?

What will happen to bitcoin in 2021? Of course, no one knows for certain, but there are a few educated guesses about Bitcoin price prediction for 2021.

Mike McGlone of Bloomberg expects that if history repeats itself, the rally will see Bitcoin fall to a hard resistance level like in 2018. He estimates this hard resistance to be more solid than back then, and the lower level to which BTC may fall is $10 thousand USD. The highest border of the range lies at $50 thousand. The analyst’s Bitcoin forecast is that the asset may go as high as $40 thousand.

Nigel Green, founder of deVere Group, doesn’t think this rally is a repetition of 2017. Primarily, back then there just weren’t as many institutional investors as there are now. Of course, there are going to be pullbacks at highs, as some investors will seek to sell for profit. However, the current momentum has all the chances to take Bitcoin to $30,000–40,000 in 2021, he claims.

Kraken Investor Survey in Q4 collected opinions of the exchange’s VIP clients. At the moment of surveying, the average expectation for Bitcoin’s price target in 2021 was $36,000.

Other opinions and predictions which didn’t make it to this Bitcoin recap can be found in the Bitcoin price prediction article by ChangeHero.

Key Takeaways

  • Bitcoin performance in 2020 is extremely positive, especially in comparison to traditional assets: it is now worth almost three times as at the beginning of the year. From $7,198.64 on January 1, it appreciated up to $22,789.06 at the time of writing;
  • Bitcoin has beaten its previous ATH on December 20, 2020. The current record is $24,209.66;
  • Authorities are grasping the unique nature of blockchain-based currencies, such as Bitcoin, and depart from the conservative approach to outright ban it or use the existing framework. More laws around the world define what digital currencies and assets are and attempt to regulate them;
  • Bitcoin was seeing unprecedented adoption at the institutional level and kept spreading among retail investors. Large services like PayPal drove the demand for Bitcoin and made it more accessible in 2020;
  • In 2021, considering the current Bitcoin performance, even moderate price targets go as high as to $36 thousand dollars.

Conclusion

Bitcoin in 2020 has had a curious journey of downs and mostly ups, and is drawing close to a spectacular year close. BTC is still the king of cryptocurrencies, and it does not seem this is going to change anytime soon.

The 2020 Bitcoin recap, which is the third part of 2020 crypto recap is over, but the series will continue! Read more articles in our blog and check the updates in any social media: Twitter, Facebook, Reddit and Telegram.


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Title
Crypto Recap 2020: Bitcoin
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Crypto Recap 2020: Bitcoin
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Bitcoin performance in 2020 is extremely positive be it price, tech, adoption and everything. And on December 20th BTC hit a new ATH of $24,209.66.
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Chum
Chum
9 months ago

Great recap. The moment we were are all waiting for, nothing will stop Bitcoin.

Xhelal
Xhelal
7 months ago

Let’s go to 100k in 2021