Bitcoin and cryptocurrencies facing chaos - 5 key crypto news for 2020

The year 2020 has been particularly rich. The events followed one another at an astounding speed. The pandemic has entered our daily lives and brought the world to a halt. However, this period has not been easy for cryptos, but their dematerialized nature has allowed them to do well. As the end of the year approaches, I offer you a retrospective of the year cryptographic in 5 highlights.

Thursday, March 12, 2020 The start of the year seems far away, so many twists and turns have been experienced. January has passed in relative calm, with some concerns over a mysterious disease in China . Then, in February, we were all sucked in by the events in China. Deserted streets and highways, teams in hazmat suits , the announcement of the first deaths,… The world held its breath for almost 2 weeks, then panic took over. Governments resorted to strict but necessary measures and markets began to fall .

The various equity indices were at their all-time high, and bitcoin around $ 10,000 . The rest followed very quickly. The market contained large leveraged orders which were gradually liquidated causing a crash. The sudden drop was fueled by BitMEX, an exchange on which it is possible to have up to x100 of leverage . At the time of the crash, thousands of traders were taken aback, resulting in stunt sell-offs. On that day, the price of bitcoin fell to $ 3,600 , before the exchange was closed for "maintenance . "

On Thursday, March 12, 2020, Ethereum experienced the worst day in its history, dropping from $ 194.97 to $ 95.87 (-51%) just 24 hours later . This sudden drop caused significant liquidations within DeFi, closely linked to the performance of ether.

The institutional flow to the crypto market We have seen so many announcements of interest in Bitcoin follow one another that I cannot list them all for you here. For me, it was MicroStrategy that led the way by announcing that it had allocated $ 250 million to Bitcoin following the halving .

After MicroStrategy, it was Square's turn to reveal its position . Finally, PayPal announced the ' opening of its payment network transactions in crypto . Since then, the announcements follow one another, and institutional investors have flocked to Bitcoin. The arrival of institutional and financial professionals helps to structure the Bitcoin ecosystem, making it more accessible.

ETH 2.0 update Since its launch, Ethereum has been based on the Proof of work consensus mechanism . In 2015, this choice made perfect sense, as proof of work is a proven and secure system. However, this mechanism lacks speed and efficiency for a blockchain that intends to be a global computer.

The current model has shown its limits time and time again. During periods of extreme feeling - euphoria as well as despair - the network is congested, not all transactions are completed, and some transactions are billed to the user for tens of dollars.

The advent of Ethereum 2.0 therefore materializes this transition to Proof of Stake , which will be accompanied by several technical improvements, including sharding . Phase 0 of the Ethereum 2.0 project began on November 4, 2020 .

The year of stablecoins and DeFi Ether recovered well from March 12, 2020, even though it is still far from its ATH. Ethereum's happy new year has benefited DeFi and stablecoins which both run on its blockchain. The mass of stablecoins has exploded this year, from $ 5 billion to over $ 25 billion . Tether remains the leader, but USDC has seen strong growth.

This craze for stablecoins is partly linked to DeFi's performance this year. We have moved from the era of ICO tokens to that of DeFi tokens . As a result, more than $ 10 billion in assets are currently invested in the Defi.

Finally, state stablecoins - or central bank digital currencies - have also received government attention between two stimulus packages. The China , the United States , the Bahamas and even the European Union is trying to create digital currency. The pandemic has accelerated the digital transition and central banks have understood that their monetary policy would only be more efficient if they were based on a digital currency.

The new Bitcoin ATHs Bitcoin's third halving took place in May 2020 . The previous 2 led to spectacular price increases in the following year. During the first halving in 2012, there were only 25,000 active Bitcoin addresses. In the second, in 2016, there were around 400,000 and today there are almost 1 million active Bitcoin addresses .

Bitcoin price movements are as much related to fundamental metrics as they are to the psychology of market participants. The fundamentals are good and the market players are clearly excited which has taken us to new heights. Bitcoin has surpassed its all-time high, which is now just above the $ 26,000 mark .

Here you have the 5 most important facts of the year 2020, but also what seems to be the right ingredients for a successful bull run in 2021.

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