The year 2020 saw a boom in cryptocurrency operations worldwide. More individuals and businesses embraced crypto exchanges as viable alternatives to traditional fiat currency-based platforms.
In the words of Yellow Card CBO Munachi Ogueke, cryptos went mainstream in 2020. This brought about a price surge, with the world’s most traded crypto Bitcoin hitting an all-time high of $19,897 – eclipsing its previous record price of $19,783 reached in 2017.
Expectedly, the upward trajectory of crypto valuation also gained the widespread attention of World Leaders, financial institutions and capital market regulators.
This article highlights five key trends that defined the crypto space in 2020.
Greater Focus on Remittances
Through the year, crypto platforms concentrated more on offering remittance solutions to businesses and individuals. Away from the focus on peer to peer (P2P) transactions, crypto businesses placed greater emphasis on enabling people to send/receive money across borders and easing payments to merchants globally.
There has been a gradual shift towards the acceptance of cryptos because there is increasing utility for them. One of the most popular uses was for remittances.Munachi Ogueke, Yellow Card CBO
One of Africa’s leading crypto exchanges, Yellow Card revealed that it processed over $165 million in remittances between January and November 2020.
The growth in remittance transactions across Africa led to the emergence of new remittance-focused crypto startups such as Cryptofully, Blueloop and Coins App. Also, it definitely got the attention of existing crypto platforms like Buycoins, which launched Sendcash in April to facilitate international money transfers.
Big Corporations Buy Huge Bitcoin Assets
Another crypto trend that defined 2020 was the purchase of multi-million dollar bitcoin assets by global corporations including Square and Microstrategy.
In this regard, Microstrategy led the way. The business intelligence company first bought a whopping $425 million worth of bitcoin between August and September, stating that the investment was necessary to hedge against possible US dollar inflation.
Another $50 million purchase of the flagship crypto was made by Microstrategy in December bringing its total holdings to 40,284 BTC.
Following the trend, Twitter CEO Jack Dorsey‘s Square bought Bitcoin assets valued at $50 million (4,709 BTC) in October, referring to the crypto as “an instrument of economic empowerment.”
Managing over $10 billion in assets, Stone Ridge Holdings in October also purchased $114 million worth of Bitcoin in treasury reserve assets.
Microstrategy’s investment has gained $303 million in just 4 months while Square’s is currently valued at $91 million.
In 2020, crypto platforms were leveraged as an alternative means for crowdfunding projects.
This came to the fore during the widespread #EndSARS campaign against police brutality in Nigeria, as the feminist coalition solicited donations to fund protest expenses through Bitcoin after the CBN blocked Flutterwave’s #EndSARS bank account.
Interestingly, President-elect of the United States, Joe Biden had in July called for contributions via Bitcoin to fund his presidential campaign.
With crypto crowdfunding less susceptible to fraud and largely outside the government’s purview, it presented a viable alternative to conventional crowdfunding platforms.
Global Payment Services Open Up to Cryptos
In October, PayPal jumped on the crypto bandwagon by allowing users in the U.S. to buy, sell and store cryptos including Bitcoin and Ethereum through its app.
The e-payments company revealed that it will also enable users to make payments via cryptos to any of its 26 million merchants in 2021.
In what was another proof of crypto’s fast-rising adoption, global payments processor Visa entered into a partnership with digital assets provider, Ternio.
Speaking on the collaboration, VISA’s Global Head of FinTech, Terry Angelos had stated: “We are excited to partner with Ternio as a cryptocurrency-focused enablement partner that can help fintechs of all sizes access the reach, scale and security of the Visa network.”
Stablecoins Gain More Traction
This year, a number of crypto platforms launched their own stablecoins. A stablecoin is pegged to stable fiat currency such as the US dollar to lessen the volatility of its price, making it a less risky investment compared to the likes of Bitcoin.
Stablecorp, a joint venture between Canada’s largest crypto fund manager, 3iQ, and blockchain company, Mavennet, launched its Canadian dollar-pegged Stablecoin QCAD in February.
Similarly, crypto P2P firm, Origin introduced its US dollar-pegged Stablecoin tagged the Origin Dollar OUSD and Nigerian-owned CoinsApp unveiled its USD-backed Stablecoin as one of the cryptos on its platform.
Also, Facebook-led Libra disclosed plans to launch its US dollar-pegged Stablecoin early next year.
The trend of crypto platforms launching Stablecoins can be attributed to bigger transaction volumes among investors, with the world’s leading Stablecoin, Tether posting an average daily trading volume of $40 billion.
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