DeutschLike the review of the old year, the outlook for the new year around the holidays is one of the obligatory topics in specialist media about cryptocurrencies such as Bitcoin. At least as interesting as forecasts of the price movements of the numerous altcoins on the market are new trends in the blockchain sector. Assessments of the adaptation of new technological approaches and promising innovative ideas are also worth reading. What can already be said at this early stage is that state recognition will lay an important foundation for the market in general and the blockchain in particular in 2020. Clearer legal frameworks are emerging in many places. What do the blockchain and Bitcoin trends look like for the coming year? CoinPro.ch shows an overview.
Not all Blockchain and Bitcoin Trends Inspire the Global Crypto Community
The German Blockchain Strategy, for example, is both a source of hope and concern within the industry. Not every crypto company and investor views plans for regulations by the state positively, as this sacrifices some of the decentralization and anonymity. In the USA, on the other hand, the so-called “Crypto-Currency Act 2020” was discussed in the pre-Christmas week. A draft law could lead to a clear categorization of crypto projects there from the new year. At the initiative of Congressman Gosar, the implementation of his draft law should enable a clear definition of the term cryptocurrency. Ultimately, there should also be an unambiguous situation regarding the jurisdiction of various supervisory authorities. Sweden’s central bank, in turn, is increasingly thinking about its own stablecoin, and comparable scenarios are playing out in other countries.
The last-mentioned development leads to ten probable blockchain trends in 2020. A complete overview is of course not possible in the booming industries due to space constraints.
Trend 1: Good Chances for the Emergence of New Stablecoins
Before the Swedish central bank spoke out with its own stablecoin plans, other countries had already considered the idea of a state digital currency. Germany, for example, is considering the introduction of digital securities from 2020, which could also promote the popularity of stablecoins at an early stage. Companies such as the US bank JP Morgan Stanley launched the JPM Coin months ago, creating a possible model for other banks and companies in general. Many business and technology experts attest Stablecoin great potential for many areas. A wide variety of assets, from ETFs to company shares and government bonds, could become digitally liquid and tradable via stablecoins. Traditional fiat money will continue to play the supporting role of hedging within the systems. Digital currencies have so far been simply too volatile and therefore susceptible to acute and massive fluctuations. It should be noted that stable coins – in whatever form – are among the most important blockchain and Bitcoin trends in 2020.
Trend 2: Will Crypto ETFs Finally be Approved in the USA?
As an important foundation for further derivatives related to the crypto market, US authorities already allowed futures and options on Bitcoin in the past year 2019. The best example is the company Bakkt, which is represented in both product areas mentioned. After a laborious, repeatedly postponed decision by the supervisory authority and a rather weak start, interest is finally increasing. For 2020, numerous market observers now expect approvals for Bitcoin ETFs. In this context, the Securities and Exchange Commission (SEC) in the USA in particular held back with the hoped-for positive assessments.
The authority has been receiving support for some time from young companies such as CipherTrace. New monitoring instruments could have a favorable effect on future decisions. Many companies with ETF plans also link the new appointment of Brad Sherman as “Chairman of the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets” with hopes. Despite Sherman’s actually crypto-critical position, some observers expect fresh impetus and see clear signals for a breakthrough in 2020 for the first Bitcoin ETFs. Should the auditors in the USA clear the way, this could serve as a model for skeptical authorities in other countries.
Trend 3: China Launches Blockchain-Based State Coins
Under the abbreviation “CBDC”, a potential digital currency of China has been circulating in news portals for months. Many experts are making forecasts about when it will finally happen. Many insiders expect the People’s Republic to finally take the last steps in 2020. The introduction will change little in the criticism of cryptocurrencies or Bitcoin mining and the associated bans. After all, China’s President Xi Jinping recently cleared up misinterpretations that led to some price increases. A statement was mistakenly understood by many as a speech “pro” cryptocurrencies. Xi later corrected himself by explicitly praising blockchain technology but criticizing digital currencies. China is planning billions in investments in the development of its own blockchain concept. Here, too, the country is striving for a leading role.
Trend 4: Will Facebook’s Libra Finally get off the Ground?
Facebook CEO Zuckerberg recently announced in a hearing before the US Congress that the Libra Foundation wants to cooperate closely with state authorities in the development of its own stablecoin Libra. They do not want to enter the area of traditional banking services, which by no means every industry expert really wants to believe. However, it is conceivable that the Facebook currency will actually come onto the market with certain restrictions after consultation with supervisory authorities in the USA and other countries. Overall, however, the Libra Association is unlikely to be deterred by the media and, above all, political headwinds, which speaks in favor of a market launch in the new year. Zuckerberg’s latest statements also speak in favor of the realization. Libra is therefore definitely part of the most important blockchain and Bitcoin trends for the coming year.
Trend 5: Hope for Better Compatibility of Different Blockchains
So far, it is still difficult for many users if the connection of different blockchain-based protocols is desired. Experts speak of the term “interoperability”, which is currently largely lacking. Much to the annoyance of many market participants. An example of the progress in this area: the Istanbul Hard Fork, through which there was recently an interoperability with the network of Zcash in the ETH system. Several current cases increasingly show that there will be significant improvements here. To date, however, there are sometimes quite significant technological differences between different protocols and thus some challenges.
Trend 6: Increase in Demand in the Crypto Lending Sector
First offers in this area have been around for some time. For 2020, financial professionals do not expect any significant interest rate increases for classic investments. This expectation could now lead to an increasing trend towards lending with crypto reference. Some providers are already promising tempting returns. Parallels in business models such as Blockfi can be seen to the popular credit marketplaces that arrange loans from “private to private”. Users earn money by lending their own crypto reserves to other platform users. The current growth rates are already impressive and if this area continues to develop in this way, crypto lending will be one of the blockchain and Bitcoin trends for 2020.
Trend 7: Stronger Market Importance for DeFi Concepts
Even if the banks mentioned are still struggling when it comes to integrating the blockchain and recognizing digital currencies: Many industry experts see the decentralization of the financial sector – in short “DeFi” – as a clear trend for the coming years. The investment sums have been rising steadily for several years and, according to forecasts, will be able to increase further in 2020 in particular. Incidentally, many analysts cite the stablecoin Dai as a trigger for the good developments to date. At the same time, a large proportion of the growth is positively attributable to decentralized crypto exchanges and the lending platforms mentioned above.
Trend 8: more Data Protection within Blockchains
If there is one point that deters both interested companies and consumers from investing in the crypto and blockchain sector, it is probably the concerns regarding the previous data protection standards. Not yet – because optimizations are now emerging in this sector as well. In particular within the (public) Ethereum blockchain, there have recently been recognizable innovations. A technological example is the format from Ernst & Young. The approach is intended to enable transactions in the mainnet in the future and better take into account the high user demands for data protection. In this way, the two topics of transparency and data protection should be able to be reconciled. Other companies are also working on new data protection instruments for the blockchain. Insiders in the data import sector into blockchain-based networks are currently giving the so-called “Oracles” good chances in the competition.
Trend 9: Ethereum Reaches the Next Level
Ethereum or the token Ether is still far behind Bitcoin in terms of pure market capitalization. But especially in the No. 2 of the public blockchains there has always been plenty of potential. Under the slogan “Ethereum 2.0”, many analysts report on the upcoming developments of the network. New developments – for example in the area of clients – increasingly open up new possible applications. In this way, the system could soon open up new target groups and shorten the distance to the market leaders, who have recently been repeatedly affected by setbacks. Once again, it is precisely the smart contracts for which there are countless use cases.
Trend 10: more Price Stability for Blockchain Transactions?
No matter how critical some insiders may be of planned state regulations or the plans at Facebook: The regulatory projects of many supervisory authorities worldwide could reduce the restraint on the part of normal investors. A significant increase in the number of users on all continents could reduce volatility in the future, so that prices fluctuate less significantly. More stability and transparency could also lead to more acceptance in trade and the banking sector. The fact that speculators appreciate the fluctuation range is another matter.
The overview of the most important blockchain and Bitcoin trends for the coming year clearly shows: In 2020, the blockchain world could be at a crossroads. Regulatory approaches, improved blockchain systems and greater banking interest are three of many criteria that will determine which trends will last and where new projects will fail.
