Key events affecting the cryptocurrency industry in 2020

CONTENT

  • Bitcoin drops to annual low of $ 4000

  • DeFi market capitalization reaches $ 1 billion

  • The crypto community was actively preparing for halving

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In a four-part series, BeInCrypto highlights key global events that have impacted the cryptocurrency market in 2020

Over the past year, bitcoin not only managed to prove its resistance to skepticism from the traditional financial market, but was also able to entice real legends from the world of the economy..

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The beginning of the first quarter of 2020 was particularly hot for the leading cryptocurrency. So, in just the first month, Bitcoin has risen in price by more than 30% from $ 7203 to $ 9544. BeInCrypto’s editors have selected the key moments that will be remembered for the first quarter of 2020.

Harbinger of the storm

Bitcoin’s explosive start to the year, however, almost fell through because of the resonant decision of the 45th US President Donald Trump to approve the operation to eliminate Iranian General Qasem Soleimani. Although Bitcoin, as a rule, does not correlate with events from the traditional economic and political world, the rate of the digital asset in just a day sank from $ 7140 to $ 6916 (-3.16%) amid the assassination of an Iranian general. Nevertheless, the negative trend did not last long, and on January 4 the price of the cryptocurrency exceeded the $ 7340 mark.

Source: coingecko.com

After peaking at $ 8389 on January 8, Bitcoin began to decline. A couple of days later, the COBINHOOD cryptocurrency exchange suddenly announced the freeze of all trading operations for a month to audit user balances, and bitcoin experienced a correction to $ 7704.

However, even this did not stop the leading cryptocurrency from jumping on January 14, when the price of BTC jumped from $ 8151 to $ 8747 per day. At the same time, one of the industry’s largest ETFs announced the launch of a regulated stablecoin. The very next day, January 15, the Bitwise cryptocurrency fund withdrew one of the last applications for a Bitcoin ETF from the US Securities and Exchange Commission (SEC). It is noteworthy here that throughout 2019, it was the topic of launching Bitcoin ETFs that remained the main trigger of the bullish trend for the cryptocurrency..

Source: coingecko.com

After a few days of increased volatility, Bitcoin hit $ 9,150 on January 19. At that time, the cryptocurrency was strengthening to such heights only at the beginning of November 2019. On the same day, the US House of Representatives Financial Services Committee announced that bitcoin is in demand among local criminal groups, as well as supporters of the white supremacy movement. Against the background of such a resonant statement, Bitcoin fell back to $ 8638.

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The next day, January 20, the situation was aggravated by South Korea’s plans to impose a tax of 20% on income from cryptocurrencies. Having dropped on January 24 to the level of $ 8244, bitcoin began a gradual ascent and already on January 29 passed the $ 9380 mark. On the same days, searches for bitcoin halving on Google reached a new record, and at the end of January, Japan officially recognized the possibility of issuing the central bank’s digital currency. On January 30, 2020, the World Health Organization (WHO) declared the outbreak of the new virus for the first time as a “public health emergency of international concern.” Bitcoin did not immediately pay attention to this event, which a month later led to the collapse of all world financial markets..

Invisible enemy

Grayscale registered the GBTC bitcoin trust with the SEC in early February. Then not everyone drew attention to this, although it was this trust that subsequently became one of the reasons for the shortage of bitcoin on the market in October-November 2020. At the same time, the Monetary Authority of Singapore (MAS) announced the entry into force of the Payment Services Act. Since then, the Asian market has become less and less viewed as a safe haven from regulatory harassment..

In early February, China’s stock indices fell 8% amid news of the raging coronavirus. Then the news about the virus was limited only to the Asian market and had not yet become a global problem that provoked a more active digitalization of the economy..

By the end of the first week of February, the bitcoin price renewed its maximum since the beginning of the year and crossed the $ 10,000 mark. Along with the growth of BTC, the amount of assets in DeFi projects also increased, exceeding $ 1 billion. If on December 31, 2019, the amount of ETH pledged in the DeFi market was $ 670 million, then by February 8, 2020 this figure exceeded the $ 1 billion mark. Then the most popular decentralized application was MakerDAO – its dominance index was 60%, and the second and third places were occupied by Synthetix and Compound, holding $ 156 million and $ 125 million in their contracts, respectively.

Key events affecting the cryptocurrency industry in 2020

Read also: What the future holds for the DeFi market: expert opinion

On February 18, the US Federal Marshals Service held an auction to sell confiscated bitcoins. About 4040 bitcoins were put up for auction (~ $ 39 million at the exchange rate at that time). Despite concerns about a possible dump of the BTC price due to such a large auction, on February 19, the cryptocurrency rose from $ 9684 to $ 10,120. However, after that, the bitcoin price began a protracted fall.

On February 19, 2020, the FSB and the Bank of Russia took the first steps to restrict the development of the domestic cryptocurrency market by agreeing to prohibit payments in cryptocurrencies in the Russian Federation. Later this proposal was approved in the law “On digital financial assets”.

Black Friday

March has become not only for bitcoin, but for the whole world as a reminder of the crisis times of the past. Bitcoin opened the beginning of the month at $ 8642. On Sunday, March 8, 2020, Saudi Arabia announced oil price discounts in the region of $ 6-8 per barrel for consumers in Europe, Asia and the United States. The Saudis’ decision sent prices into a tailspin, plummeting Brent prices by 30%, the biggest drop since the Gulf War.

A couple of days later, on March 10, Saudi Arabia announced an increase in production from 9.7 million barrels per day to 12.3 million. The uncontrolled development of the situation continued to negatively affect the dynamics of oil prices, sending them to an 18-year low.

Source: coingecko.com

The Russian-Saudi price war has not spared bitcoin either. On Friday, March 13, 2020, its rate collapsed to an annual low of $ 4,120, and the market capitalization fell to $ 75 billion.At the same time, Trump declared a state of emergency in the United States due to the coronavirus.

Bitcoin was able to return to the level of $ 10,000, albeit for a short time, only in early June.

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Key events affecting the cryptocurrency industry in 2020
Key events affecting the cryptocurrency industry in 2020
Key events affecting the cryptocurrency industry in 2020
Key events affecting the cryptocurrency industry in 2020

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