The cryptocurrency market saw of 2020 in the most spectacular way possible – Bitcoin smashed all time highs, institutions poured in by the millions, Ethereum 2.0 launched, and PayPal legitimized cryptocurrency to the masses – and that was just the start. It really was rub your eyes time, a spell of consistently good news that made the last three years worth the pain.
The concluding part of our 4-part review of crypto in 2020 looks at what happened between October and December, so you might want to read parts 1-3 to catch up on the rest of the year’s action before diving into the dessert that is Q4. Spoon at the ready? Let’s go!
October was one of those crazy months where a year’s worth of action takes place in a few weeks. It began with Chainalysis announcing that it had won a contract to crack Monero transactions on behalf of the IRS, which hammered another nail in the already unpopular company. The lid was practically screwed on for good when CEO Michael Gronager said two weeks later that privacy coins serve “crime syndicates”, something that apparently didn’t apply to Bitcoin whose criminal usage had reduced to just 1.1% according to a Europol report.
Talking of criminal operations, October was the month when BitMEX finally got its comeuppance as a 15-month long CFTC investigation ended with charges leveled against the exchange’s founders and top executives. Co-founder and CEO Arrhur Hayes remains at large in Hong Kong where the CFTC can’t touch him, but all three members were replaced at the company and a head of compliance was hired as the exchange announced plans to go legit. At which point everyone left.
BitMEX executives weren’t the only ones on the wrong side of the law in October – OKEx founder Star Xu was taken by police to assist in a long running Chinese money laundering investigation, causing withdrawals on the exchange to be halted, a situation that would remain for over five weeks.
The most startling arrest was perhaps that of perennial fugitive John McAfee who was arrested in Spain on behalf of U.S. authorities for tax evasion. Unless it was one of his body doubles…
October was also the month in which governments went CBDC crazy – China tested their digital yuan in the real world in Shenzhen and announced that further real world trials would take place in Beijing, Japan and Switzerland announced that tests of their CBDC would take place in 2020, the Bahamas announced that they had launched one, and Russia announced that they weren’t too bothered about one at all.
Bitcoin enjoyed October in more ways than one. The price rocketed from $10,650 to $14,000, aided in no small way by more companies getting aboard the Bitcoin train – Square announced a $50 million BTC purchase while Stone Ridge picked up ₿10,000 as the institutional express picked up steam.
Retail wasn’t to be left behind however as PayPal unveiled a platform that would allow their 286 million U.S. customers to buy cryptocurrencies through them, representing the single biggest boost to mass adoption that cryptocurrency had ever experienced.
The bullishness didn’t just stop with PayPal and institutions however – JPMorgan, whose boss Jamie Dimon has made a habit of slating Bitcoin, produced an investor report that highlighted Bitcoin’s “considerable” long term upside and its potential to compete with gold as an alternative asset class.
October was also notable for the biggest ever Bitcoin transaction, which saw ₿92,857, worth a staggering $1.22 billion, moved between wallets at a cost of $1.32. No details were given or known regarding the two parties (obviously) but the move capped a crazy month for Bitcoin.
Bitcoin began November at $13,730, although its rapid ascent, helped buy a sudden influx of institutional buying and backing, was going largely unnoticed by the mainstream media and the general population, with Google searches still at May 2017 levels. This was despite Bitcoin breaching its all time market cap and bypassing 2019’s high just three days into the new month, while the potential for Bitcoin 401ks became a reality.
Privacy coins weren’t enjoying quite as nice a November however as it was announced that they would be banned from South Korean exchanges in 2021, an idea that ShapeShift got on board with right away and delisted Monero and Dash, adding to the exchanges that had already banned them in years gone by.
One man who could have done with bringing a little privacy into his activities was the hacker who stole ₿69,472 from Silk Road in 2012 but couldn’t resist selling some in 2017. This mistake led to him being identified by U.S. authorities, who made him hand the rest over on November 4, a haul worth $957 million. Ouch.
November saw Ethereum fans (and frankly anyone who had tried to trade on a decentralized exchange) have their prayers almost answered, as, following years of development, Ethereum 2.0 finally seemed like it was finally becoming a reality – on November 6 the deposit contract for the staking mechanism was opened, with the total of 524,288 ETH being finalized within hours of the deadline on the 24th, meaning that Ethereum 2.0 Beacon Chain would launch in December.
Another heavily anticipated launch took place this month too as PayPal’s new cryptocurrency platform opened to investors, with Pantera Capital noting the impact on the markets almost immediately. Others who also noticed the impact of the PayPal platform included those who tried to use it and got permanent bans when they tried to sell.
Bitcoin’s price went on an absolute tear during the second half of November, stopping just $221 short of the all-time high set in December 2017. Bitcoin then did the most Bitcoin thing possible and dumped $2,200, reminding everyone that a bull market isn’t plain sailing.
December began with great news for Ethereum fans who saw the Ethereum 2.0 Beacon Chain go live on December 1 after years of development and delay, ushering in a new era of proper scaling, cheaper transactions, and staking.
The launch of Ethereum 2.0 wasn’t the only big news to come Ethereum’s way this month – on December 16 CME Group announced that Ethereum futures would go live in February 2021, more than three years after the group with its Bitcoin futures.
The mammoth PlusToken scam came to its hoped-for conclusion as the ringleaders were sentenced to up to 11 years in prison after stealing what some estimates put at over $10 billion worth of cryptocurrencies in a little over a year.
December saw MicroStrategy go even bigger on Bitcoin, buying another $50 million worth before announcing a stunning $400 million fundraise to buy more. And they weren’t alone – Ruffer Investment announced $750 million cryptocurrency buyup the day before One River Asset went one better and said it intended to put $1 billion into Bitcoin and Ethereum.
These staggering sums, added to the hundreds of millions of dollars put in by other companies, reaffirmed that the herd was finally coming, and it was this buying pressure, alongside the PayPal platform allowing retail to take part on a massive scale, that helped Bitcoin finally banish the demons of 2017 and blast through the $20,000 barrier to reach all time highs on December 16.
Breaking all time highs was an incredible way for Bitcoin to sign off on the most tumultuous peacetime year that the world had seen for decades, something that looked all but impossible after its crash to $3,850. Breaking $20,000 represented the overcoming of a huge psychological barrier, and meant that anyone who has even bought Bitcoin had at least broken even.
Naturally Bitcoin’s all time high grabbed all the headlines not just from the month but from the whole year, and allows supporters and holders to look forward to 2021 with a renewed sense of optimism that, once again, the moon is in sight.
Crypto’s Crazy 2020 Ends on a High
Cryptocurrency had enjoyed a remarkable January-September, coming from the depths of a 51% crash in March to set up a bull run, but Q4 just blew it out the park. The space had never seen such a rush of retail and institutional adoption in such a short period of time, and Bitcoin breaking its all-time high was simply the cherry on the cake.
Of course no one knows what is in store for cryptocurrency in 2021, but if it’s anything like 2020 then we’ll all need to reinforce our already stretched seatbelts.
Enjoy the ride…and buy the dip.