- 2020 has been an eventful year for crypto, with rallies and crashes, which got replaced with new rallies.
- With the expected bull run still pending, whales, as well as hedge funds, are waiting for new opportunities.
- Bitcoin is still far from being a solution it needs to be, but it is an alternative for the crashing financial
The crypto industry rarely stands still, and even when a major coin like Bitcoin does experience a period of calm, it usually doesn’t last for long. With that said, even the volatile and chaotic crypto industry is likely to find this year quite eventful.
Bitcoin in 2020
The year started quite optimistically, with a strong surge to $10k in late January and early February. What followed was a strong correction, which was not too big of a deal for experienced traders, who knew that the price that sharply goes up eventually must go back down.
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However, the COVID-19 pandemic interfered with the natural order of things, causing a strong price crash. In the aftermath, the price went from $10k in mid-February to $4k in mid-March.
Such violent volatility is rarely seen, even when it comes to BTC. In fact, the only other occasion when the price behaved like that was in 2018, when it crashed by over 80% within a single year.
But, just like corrections follow large surges, strong recoveries follow large drops. Bitcoin’s drop was not caused by the people losing faith in crypto, scams, or similar reasons. Instead, it was caused by correlation with the stock market, which meant that the coin will recover, which opened the door to greed.
With greed quickly replacing fear, BTC price surged again, reaching $10k once more. With the mid-May halving also taking place this year, expectations for BTC price are high, and this even caused large hedge funds to make their move, alongside the whales.
Can Bitcoin help if traditional finances fail?
Another reason why BTC is seeing so much activity is the infinite money printing that central banks announced in order to provide momentary relief during the pandemic. However, while a nice gesture — and undoubtedly necessary, considering how many businesses shut down and how many people lost their jobs — it will have strong consequences.
Many are expecting USD price to crash and inflation to lead to an even bigger economic meltdown, one that is likely to affect the entire world. Unlike the financial crisis from 12 years ago, the world has an alternative this time — Bitcoin. While the asset is still young, and far from being a solution fully capable of sustaining the economy while fiat currencies crash, BTC does provide attractive opportunities.