The cryptocurrency market during the third quarter of 2020 more or less belonged to Uniswap and DeFi, as yield farming and food-based meme tokens took the crypto world by storm. The same period also ushered in a new phrase in the crypto lexicon, rug pull, with which many sadly became accustomed.
Part three of our four-part review of crypto in 2020 looks at what happened between July and September, with part four coming tomorrow. If you haven’t read parts one and two of our 2020 review yet, then you’re officially missing a treat. Got your rug ready? Let’s get pulling!
Q3 kicked off with some good news as crypto debit card operators using Wirecard were allowed to resume services, following the collapse of the company in June. The scandal took a turn as it was revealed shortly afterward that the Wirecard COO had fled his home in Dubai with “significant sums” of Bitcoin.
The CBDC bandwagon rolled on this month with the Committee on Banking, Housing, And Urban Affairs told that a digital dollar would “futureproof” the dollar. This put the U.S. behind Lithuania, who launched their own CBDC this month, while Visa’s head of cryptocurrency Cuy Sheffield said that CBDCs had the potential to change the concept of money.
Bitcoin began July at $9,145, an incredible show of resilience having crashed to $3,850 just four months previously, but better was to come – after consolidating for most of the month it blew through $10,000 on the 27th, ending the month at $11,350. As well as enjoying some great price action, Bitcoin also gained another celebrity supporter this month as Anthony Pompliano appeared on the Bill Bert podcast, where he convinced comedian and actor Bill Burr to buy Bitcoin.
Like a Windows laptop on a slow internet connection, Ethereum developers were slowly grinding through the huge upgrade to Ethereum 2.0, with the queen of Ethereum herself Vitalik Buterin admitting that she had “underestimated” the work needed to carry out the upgrade.
July was the month that TikTok discovered cryptocurrency, or more specifically Dogecoin. The meme-loving Robinhood-account-wielding teens helped rocket the animal 143% in three days. This was to prove their only venture into the crypto world however, for now at least.
July was a bumper month for crypto crime fans, with three notable events taking place. Firstly came the Twitter hack which saw the accounts of world leaders, celebrities, and other influential users taken over by a hacker, who, rather than starting a third world war, solicited ₿13 from unsuspecting dupes.
Next came a breach from hardware wallet maker Ledger, who saw customer records by the bucketload stolen, including email addresses, phone numbers, and home addresses. Those affected have since been fending off relentless emails and SMS messages from the scammers, resulting in some losing their holdings.
Finally, July saw the PlusToken scam come to the most satisfying conclusion possible with the arrest of the founders and hundreds of employees in a series of raids by Chinese police in Cambodia, Vanuatu, and beyond. The scam is thought to have raked in between $5 and $10 billion worth of cryptocurrencies in little over a year.
August saw Bitcoin maintain the momentum it had enjoyed towards the end of July, seeing $12,477 in the middle of the month as the coronavirus hit the dollar and other currencies. Bitcoin’s rise even attracted a shining light of the trading world in Dave Portnoy, who, after years of ignoring Bitcoin because he didn’t understand it, said he would get back in if the Winklevoss twins came over and explained to him what it was. They duly did and he duly bought, only to sell just over a week later, unable to stomach the volatility.
August saw Russia tighten its grip on the crypto activities of its citizens as it banned the anonymous depositing of Bitcoin into wallets, but there was better news for citizens of other countries, most notably the U.S. where the New York State Department of Financial Services (NYSDF) ruled that banks were allowed to hold cryptocurrencies for customers.
In fact, institutional support for Bitcoin was suddenly hitting unprecedented levels – after Paul Tudor Jones’ support in May, former Prudential CEO George Ball called Bitcoin an investment “staple” and software company MicroStrategy announced a plan to convert a quarter of its balance sheet to Bitcoin to stave off a falling dollar. They put their money where their mouth was shortly after, buying up $250 million worth.
August was the month that Zeus Capital began an extraordinary campaign against Chainlink, throwing all sorts of accusations at it, including labeling it a “Russian pump and dump scheme”. The frankly bizarre campaign was soon revealed to be nothing but a ploy to profit from their short position by crashing the price of the token. Hilariously it didn’t work, as LINK did the exact opposite, hitting $20 in mid-August, liquidating them.
August will also be remembered as the month that DeFi went bananas. Yield farming was all the rage, YFI hit $39,700, and Uniswap was the only place to be. The decentralized exchange was suddenly awash with YFI clone coins, with anything beginning with YF doing a 10x overnight. This quickly morphed into food memes, with YAM, PIZZA, HOTDOG and more showing up the crypto space for what, sadly, a large part of it is – a shameless money grab.
The September Effect proved it was no idle superstition in suitably dramatic fashion – just 48 hours into the allegedly cursed month, Bitcoin crashed $2,000. However, at least Bitcoin was around to experience such a drop, which it would not have been had a bug discovered in 2018 not been successfully patched and deployed in early September.
This volatility didn’t stop a previous Bitcoin bear turning bull, as Jim Cramer, host of CNBC’s Mad Money show, admitted to being a convert after speaking to Bitcoin’s promoter-in-chief, Anthony Pompliano.
If August was the month that the Uniswap show got started then September was its showstopping finale – volume increased tenfold as the entire space rushed headlong towards it, pointless DeFi tokens made and lost hundreds of thousands for ‘investors’, and rug pulls became the norm.
Uniswap greed and stupidity hit its peak in September when Eminence, an accidentally released coin, was bought up blind by opportunists, who then lost everything when the incomplete smart contract was drained. The group’s attempt at crowd sourcing a lawsuit did not go down well. What did go down well however was Uniswap rewarding its users with a free airdrop of UNI tokens to anyone who had used the platform, which was worth thousands of dollars to many.
Craig Wright’s legal troubles continued when he failed to get his case against the estate of former associate Dave Kleiman thrown out, with the judge denying every one of the six claims he made as to why it shouldn’t go ahead. It almost seems like he doesn’t want to fight it…
However, if the cult of Craig Wright was bizarre enough to understand, then the case of the satanic Microsoft blockchain patent was frankly frightening – former CIA investigator Kevin Shipp linked the blockchain-enable Microsoft HoloLens 2 product to a conspiracy theory involving Bill Gates, Serbian artist Marina Abramović, and a satanic plot to implant microchips in the population.
Bitcoin Just Warming Up…
Bitcoin ended the quarter at $10,700, but there was little sign of what was to come. Uniswap would implode; Bitcoin would go on to finally break $20,000 in December; PayPal would launch a cryptocurrency service; and companies, institutions, and pension funds would fight over themselves to buy into the cryptocurrency space.
All this and much, much more, to come in the concluding part of our cryptocurrency review of 2020.