However, we hope that this year 2021, will be another excellent year for Bitcoin with the already booming bull market and the emergence of Bitcoin as a hedge against inflation.
In this article, we will be looking at the Bitcoin price movement in 2020, the major developments that occurred within the year, the institutional investment, and most of the memorable moments in the year.
Bitcoin: The year 2020 in retrospect
Even with the chaos and all the issues surrounding the COVID-19 pandemic, Bitcoin continued to make significant progress throughout last year. Many notable achievements were recorded in the crypto community, while Bitcoin’s price was unpredictable throughout the year.
Let’s look at most of the notable events that happened in the year 2020.
Bitcoin Price Stats
There were a series of speculations by crypto investors about the price of Bitcoin in 2020. Most crypto enthusiasts envisaged a bullish movement in Bitcoin’s price, while others predicted a bearish price movement. However, the majority of these predictions got it all wrong.
Bitcoins opened in the year 2020 with a price of $7,200 on January 1 before rising above $8000 in the next few days. During the same time, a Chicago Mercantile Exchange (CME) launched Bitcoin options contact, giving institutional investors more tools to receive more exposure to the cryptocurrency. The month looked promising to investors. During the same month, one of the world’s largest banks Goldman Sachs and Citigroup, executed an equity swap similar to Ethereum on the blockchain network. All those showed a promising start for Bitcoin in the year. It showed that the year could see massive achievements in the cryptocurrency industry.
The price rose steadily till it peaked at above $10,000 in February, making experts predict a more bullish movement. However, as the pandemic continued to rise, China delayed the development of its national cryptocurrency. The spread of the virus was only limited to China, giving crypto enthusiasts hope that the pandemic would be over soon.
However, towards the end of February, things began to turn from bad to worst. The pandemic began to spread to other countries like wildfire, putting fears on crypto investors. The world financial system was in a state of coma.
The March Crash
March was one of the notable months to remember by the crypto community. It is a month that saw Bitcoin’s price dip to $3,850 – the worst dip since 2013. It’s worth noting that, not just Bitcoin or cryptocurrencies in general crash, but all the assets around the world plummeted during the start of the Pandemic. This bearish movement triggered many questions among investors that many attributed the crash to the coronavirus fears amid the looming lockdowns around the globe.
The fears that accompanied the pandemic made so many investors dispose of their holdings. It resulted in the crash of the price of Bitcoin. It was not just limited to BTC; all other coins were affected. However, when the dust settled, many saw that the worst has gone and the best were yet to come. That was due to the way the various governments fought the pandemic.
The May Bitcoin Halving
The month of May was another month loaded with lots of things to remember in the crypto industry. It was the month where we experienced Bitcoin halving. The Halving is the reduction in the Bitcoin emission rate (that is, the block subsidy that occurs every 210,000 blocks, which is approximately every four years).
The Halving took place on May 11 at 19:23 UTC. It was after the 630,000th block was added. The bitcoin mining reward was slashed by half. (from 12.5BTC to now 6.25BTC per block mined).
The halving event occurs every four years and reduces the mining reward in half. As the total supply of Bitcoins is capped at 21 million, it is expected that all the Bitcoins will be mined by the year 2140. Meaning that with the continued demand for Bitcoin and the halving of supply, we should expect that the price will rise. Also, if the demand was to rise while supply was reduced, the price could also rise, as we observed during the first two months of 2020.
The Rise of Bitcoin
After the March crash and the May BTC halving, the month of June saw Bitcoin recovering from the past few months’ events. In June, the legacy market had a complete recovery following various monetary injections. NASDAQ reached a new all-time high.
The month of July saw the cryptocurrency market surge to a five-month high with the total market capitalization exceeding $300billion.
However, while we were hoping that the market was coming back to life, various countries’ regulatory bodies were beaming their searchlight into the cryptocurrency industry. The USA top regulators were moving to scrutinize the industry, which led to a deal between the SEC (Securities and exchange commission) and telegram resulting in telegram paying a fine of $18.5million. All these happened in June, but it revealed what regulatory landscapes would look like in the months to come.
The month of July was another month with unprecedented records. For the first time in 6 months, Bitcoin price rose above $11,000 on July 31, giving investors hope that the digital currency has undergone full recovery from the March crash.
September was another month to remember in 2020. It was the month Ethereum price surged to $470 after steadily rising all year. It increased the adoption of DeFi (Decentralized finance) built on the Ethereum network.
In the same month, MicroStrategy revealed that it had acquired an additional $175million worth of Bitcoin, which raised the company’s total Bitcoin holdings to around $416million. It was one of the notable institutional investments recorded within the year 2020.
The PayPal October To Remember
While the market has made a full recovery and with the pandemic effect reducing, countries were beginning to open up. At the other end, PayPal, one of the world’s largest online payment processors, announced its plans to start offering its customers the option to buy, sell and store cryptocurrencies on October 21. It was one of the massive deals that the industry recorded within the year. That is because it means that the vast community of merchants that PayPal serves will start to be able to use cryptocurrency as a payment means.
Furthermore, Square Inc revealed that it had purchased $50 million worth of Bitcoin, which was one of the notable institutional investments on Bitcoin within the year.
On top of it, Bitcoin’s price rose to an all-year high of $13,000 towards the end of October- birthing the beginning of the Bitcoin price surge we see today.
Bitcoin Price Surge in November and December
For the first time since January 2018, Bitcoin price rose above $16,000 and peaked at $16,300, driving the market to an all-year high record on November 13. And by November 30, Bitcoin reached an all-time high of $19,864 for the first time, surpassing its 2017 all-time high record. There were various predictions on the price, with many crypto experts predicting a price crash in the next few days.
However, the reverse was the case in December. This was because Bitcoin reached an all-time high of $23,000 in December on its bull run.
However, on December 27, Bitcoin crossed the $27k mark while it peaked at $28,484 on December 30.
On December 31, being the last day of the year, Bitcoin’s price was flying non-stop. The price rose above $29k, heading to the $30k primary target for Bitcoin.
Major Institutional Investments in Bitcoin in 2020
There were numerous Bitcoin investments within the year 2020, which experts think might be the reason behind the surge of cryptocurrency market cap.
While NASDAQ listed company MicroStrategy announced that it would switch their balance sheet from dollars to BTC which represented about $500 million US dollars. On September 15, Jack Dorsey’s square Inc announced that it had purchased $50million worth of Bitcoin, building up a rally that will go down in history.
The Growing Adoption of Cryptocurrency in 2020
Even though the year 2020 was seen as one of the worst years for investors, Bitcoin and cryptocurrency recorded a massive success across all fields. The adoption of cryptocurrency rose within the year.
In the year 2020, PayPal, the top payment merchant, announced its intention of integrating cryptocurrencies into its platform.
In July, the United States office of the comptroller of the currency issued a memo providing a green light for banks to start offering cryptocurrency custodial services. It was a move which covers all national banks and federal savings associations, thereby reducing the regulatory battles cryptocurrency was facing in the country. It was not only essential for development; it also paved the way for institutional investment in cryptocurrency.
In December, Wall Street announced that it was officially going in on digital assets. S&P Dow Jones indices issued a statement confirming that it will debut cryptocurrency starting from 2021. This news came amid the partnership they had with Lukka, a top USA based Blockchain data provider.
After months of speculations, JP Morgan launched their coin in October 2020, a straightforward dollar-backed stablecoin. And given the global popularity of JP Morgan, it was estimated that the coin would save the global financial industry millions of dollars.
Closing Words
The year 2020 was a great year for crypto traders and the cryptocurrency industry at large. The greatest was that the cryptocurrency community survived the pandemic and surged to an all-time high. The year also saw numerous investments in cryptocurrency, such as the rising adoption of the DCA (dollar-cost averaging) by the various platforms, the formalization of Bitcoin improvement proposals (BIPs), among notable investments.
All these show that we are yet to see the best of Bitcoin and cryptocurrency. It also shows that Bitcoin and cryptocurrency have come to stay. It should also put a stop to all the nasty rumors surrounding the cryptocurrency industry at large. Keep HODLing!
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Written by: Narender Charan
