So 2020 is up and running and we’ve already seen some big stories in the world of blockchain and cryptocurrencies. But what will the rest of 2020 hold and should investors HODL for the rest of the year? Lee Hills, CEO of blockchain regulatory specialists SolutionsHub shares his predictions for crypto in 2020
The year of the bull is not likely
May 2020 will bring the next Bitcoin halving – that is the moment the block reward for mining Bitcoin halves to 6.25 BTC.
For speculators and investors, it’s important because such events historically have a huge impact on the price of Bitcoin. The effect of a halving is that with fewer bitcoins being generated, scarcity is increased making them more valuable. But history shows us this doesn’t happen right away – and it’s unlikely 2020 will be the year of the bull.
The previous Bitcoin halvings resulted in new ATH (all-time high price per BTC). After the first halving, it took 369 days for BTC to go from $12.31 at the day of halving to $994.21. From the second halving, it took 526 days for the price to go from $650.63 to $19,535.70, culminating in the bull run of Q3/Q4 2017.
Some are hopeful we’ll see a bull run in Q4 this year but, 2021 is more realistic.
The PBOC will change the world, forever
We’re waiting with bated breath to see which nation’s central bank will be the first to launch a Central Bank Digital Currency (“CBDC”) and the smart money’s on China.
The US, Canada and Russia are among the governments who have said they are working on a CBDC but the People’s Bank of China will launch first and it will be a significant milestone in the short history of cryptocurrency, not least that of the global financial system.
Related: China’s DCEP will change the world
When Facebook announced plans to launch its own coin – Libra – in the summer of 2019, it caused quite a buzz. A cryptocurrency with a mass adoption potential almost overnight was on the cards and, with brands including Mastercard, Visa, PayPal and eBay on board as part of the “Libra Foundation” it looked like a project to reshape global finance.
But then, things started to go wrong. Concerns were raised around privacy, money laundering, threat to national financial stability – the usual anti-crypto stuff but with the magnifier of Facebook thrown in for good measure. Mastercard and Co took flight, Mark Zuckerberg was questioned in the US Congress and the project appears in peril.
Zuckerberg is not one to give up without a fight but, with the way things stand at the moment, it’s difficult to envisage Libra launching this year.
Regulators given a workout
The blockchain industry is nothing else if not fast-moving and that proves a nightmare for regulators.
The US Securities and Exchange Commission had barely caught up with ICOs when IEOs starting springing up and it took until this year for the SEC to speak publicly on these.
At the moment, it’s difficult to see things getting any easier for regulators. As the adoption blockchain tech increases and use cases become more diverse, the powers that be will have to be much quicker on their feet to keep up.
We might even see policies put in place to block progress of some initiatives, just to allow regulators time to catch their breath, conduct research and draft guidelines. And that will not go down well. Historically, emerging sectors hampered by prohibition have moved offshore rather than wait for home-country authorities to catch up.
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