RESEARCH & ANALYSIS
FOR THE CRYPTO ECONOMY.

5 key predictions for crypto and digital assets in 2020

5 key predictions for crypto and digital assets in 2020

Midway through 2019, cryptocurrency has defied the odds and remains relevant, all while gathering enthusiasts and institutional support globally.
Here are the 5 key predictions for what we can expect in the cryptocurrency space as we head towards 2020.

Bitcoin recently surpassed the $10,000, and then $12,000 mark, in a surprise show of rapid appreciation and has, even more surprisingly, held fast at that approximate value since. This, along with various technical indicators, and the newly-rising trading volumes, are a solid indicator that the crypto winter has finally come to an end. Midway through 2019, cryptocurrency has defied the odds and remains relevant, all while gathering enthusiasts and institutional support globally.

Here are the 5 key predictions for what we can expect in the cryptocurrency space, as we head towards 2020:

1. Price increases

As 2020 approaches, bitcoin in particular will have its value sustained, by increasing institutional investment, growing adoption rates and other contributing factors. General predictions amongst experts are that bitcoin will continue to reign supreme over the top coins of the market in 2020. Many institutions will want to buy BTC, in the hopes of accumulating investments, which will pay-off, in a big way, in the near future. 

Additionally, the Lightning Network is expected to add insurmountable value to bitcoin over the next two years, as development continues, and adoption becomes more mainstream. The broadening of bitcoin’s value should also affect the overall value of other leading currencies like ethereum, ripple, litecoin and more. 

2. The trade of digital assets and commodities

Another prediction for the market is that we can expect to see the increased trade of digital assets and commodities in the near future. Ongoing developments in blockchain technology are making it easier for marketplaces to pop up, and noteworthy assets to then be tokenized. Despite these developments, it’s not immediately clear which protocols will win out amongst end-users yet, but depending on which one does, speculators are likely to become interested and establish a full trading market.

As for blockchain technology acting as a separate entity from cryptocurrency, experts predict that enterprises, in particular supply chains, are set to implement some measure of blockchain into their everyday businesses over the next few years, as solutions become more universal.  

3. Increasing liquidity

Liquidity is one of the most important and crucial characteristics of the cryptocurrency market, aside from market capitalization. Liquidity, in this case, refers to the extent to which an asset can be quickly purchased or sold, without having an effect on the stability of the asset’s overall price. Over the next six months, growing trading volumes and higher exchange activity, bolstered by the recent price surges, will increase overall market liquidity. That being said, it will be key for cryptocurrencies to be accepted by more businesses and institutions as a payment method over the next few years, to increase usability and trade.

4. Centralized cryptos

As more cryptocurrency assets gain prominence with regular investors, various governments will look into the viability of launching their own centralized digital currency. These governments will likely be of smaller countries to start, launching cryptocurrency-to-fiat options on a centralized ledger upheld and managed by the government.

Moving towards a digital currency would create heightened short-term demand for the currency as a convenient and regulated payment method, particularly in places currently experiencing financial turmoil. Estonia is one of the first countries to have implemented blockchain technology on the federal government level, including 2-factor authentication, enabling citizens to control and verify their personal data. 

5. Blockchain-based solutions 

The governments’ adoption of blockchain technology will become more likely as we approach 2020 and beyond, but this isn’t the only sector set to benefit. Banking and finance are two industries that will lead adoption, as both face issues specific to data storage, and transaction speed and costs. ReiseBank AG in Germany was one of the first examples of instantaneous blockchain payments being successfully facilitated by a financial institution. 

Identity systems on the blockchain will also gain prominence with these institutions, providing a consolidated source of verification and personal data online. These identity systems will also put control of personal data back into the consumer’s hands. 

Key indicators show that crypto has entered a decided upturn, which will have beneficial effects on adoption and usability. The next few months are predicted to bring about both further price increases, and the expansion of digital asset plus commodity trading. Centralized, and even government-facilitated cryptocurrencies, will be a topic of serious consideration in the next few years, and like Estonia other smaller countries are likely to lead the way in adoption on a national scale. Lastly, in 2020 blockchain-based solutions are set to change how governance, finance, banking, and personal data management will work for end-consumers in an impactful way. 

About the author: Kirill Bensonoff is the CEO of OpenLTV. For more information visit his author page.

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