2020 has turned out much better for long-term investors than the previous year. The market capitalization of 30 key assets of the cryptocurrency market has grown by 308%, according to a report from CoinGecko.
The growth of the 30 most capitalized cryptocurrencies over the past year was five times higher than in 2019 (308% versus 62%). Portfolios with DeFi protocol tokens gained 718% on average.
The total capitalization of cryptoassets from the top 30 in 2020 increased by $ 552 billion. In the top five coins, bitcoin showed the best results, having risen in price by about four times (in 2019 – by 95%). Ethereum looked even better, the price of which rose by 472% after near-zero dynamics over the previous 365 days.
As a result, the bitcoin dominance index rose by 0.9% to 73.7%. Ethereum’s share of total market capitalization increased 3.6% to 11.5%.
The largest stablecoin Tether (USDT) also increased its market share – from 2.4% to 2.9%, while the share of other coins from the top 8 decreased. The market was significantly influenced by the debut of Polkadot (DOT), which accounted for about 1.2% of the total capitalization.
Last year was marked by the rapid growth of the stablecoin segment. USDT supply increased by 388%, USDC – by 652%, DAI – by 2698% and BUSD – by 397%. The total capitalization of the listed tokens, as well as PAX in 2020, increased by 439% – from $ 4.7 billion to $ 27 billion.
The volume of the DeFi token segment in September reached 4.6% of the total cryptocurrency market capitalization. By the end of the year, the ratio had dropped to 2.5% amid growth in other coins.
The Chronicles of DeFi in 2020: Explosive Growth, Challenges and Barriers for Institutions
At the end of the year, the capitalization of decentralized finance tokens exceeded the summer peak by 4%, amounting to $ 20.4 billion. Analysts did not rule out the resumption of DeFi mania in the event of a decrease in the bitcoin dominance index.
The dynamics of DeFi tokens in 2020 has been mixed. YFI (+ 2788%) and UMA (+ 2423%) stood out with noticeable growth. SUSHI, MKR, AAVE, UNI and COMP tokens brought holders less than the market average.
Analysts compared the current Bitcoin rally to the 2016-2017 bull market, when the price of the first cryptocurrency rose by 4527%. Growth of 303% in 2020 exceeds the intermediate results in the previous bitcoin cycle (+ 130%).
Experts saw the possibility of repeating the dynamics of four years ago thanks to three drivers:
- increased availability – an example is the addition of PayPal to the ability to buy and sell cryptocurrencies;
- active work of “printing presses” (leading central banks of the world, saturating the economy with monetary supply to mitigate the consequences of the COVID-19 pandemic);
- Bitcoin Adoption Among Institutions – Public companies like MicroStrategy and Square have begun adding Bitcoin as a reserve asset in liquidity management.
In 2020, bitcoin looked much better than indicators of traditional assets. In comparison with the leader Nasdaq Composite, the growth was seven times higher – 303% versus 43%.
Analysts mentioned the collapse on March 12-13, when Bitcoin fell immediately by 35%. The oil prices dropped more strongly during the day (-45%).
During the growth of bitcoin by the end of 2020 to levels above $ 29,000, its capitalization became almost equivalent to the value of Facebook, accounting for 5.6% of the assessment of all mined gold.
ForkLog previously reported that institutional investors have acquired a total of over 1M BTC (~ $ 37B).
Analysts at JPMorgan believe that for the rally to continue, Bitcoin must gain a foothold above $ 40,000.
2020 in numbers: Bitcoin records, DeFi boom and institutional adoption
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