From coronavirus to Libra, the crypto market news to watch
As markets lick their wounds following a recent price dive, we look at the crypto market news to watch – and the main themes that could emerge in 2020.
Crypto market news often moves at a dizzying pace. Within a matter of minutes, the price of Bitcoin can tumble by hundreds of dollars – leaving investors struggling to figure out why. Here, we’re going to give you an in-depth crypto market outlook that explores the challenges and opportunities facing the industry right now. We’ll also look at some of the best altcoins to invest in for 2020.
Crypto market news to watch
So… what are the stories that are going to drive price fluctuations in the near future? Looking at some of the main themes in the crypto market latest news can offer precious intelligence.
Practically every crypto market prediction made in the past few months has been ripped to shreds by the coronavirus. Bitcoin had been on an impressive bull run that meant 2020 was shaping up to be the best year ever for the world’s largest cryptocurrency. But as the number of cases grew outside of mainland China – most notably in South Korea and Italy – much dreaded losses reared their ugly head.
Over the course of February, BTC fell by 8.72 per cent. These losses accelerated in the final week of the month, when prices dropped 11.28 per cent to settle at $8,566. Crypto market news had long described Bitcoin as “digital gold” – an asset investors turn to when things are going badly in the stock market. Recent events bring this into disrepute. The BTC bloodbath came as trillions of dollars were wiped off the stock markets, indicating its fate is more closely tied to the traditional economy than initially thought. That said, all of this could just be an anomaly.
Crypto market cap news also made grim reading in the latter half of February. For a brief time, it had managed to break through the elusive $300bn barrier, but $60bn was wiped off its value in the space of two short weeks.
However, to focus on the coronavirus wouldn’t be giving you the entire picture. There are many factors at play – and although COVID-19 look set to be a recurring theme for the foreseeable future, major events in the crypto world will also have an impact.
If you’ve followed Bitcoin closely over recent years, you’ll know that one of these events is the upcoming halving. This is where the reward given to miners for creating a new block is slashed by 50 per cent, an act which, in the past, has had the effect of inflating BTC’s value.
The crypto market outlook remains largely positive in the medium term because of this. To show the levels of optimism, just look at this (unscientific) poll by Grayscale Investments on Twitter back in December. When its 36,500 followers were asked whether the halving was priced into Bitcoin, 56 per cent said no, 27 per cent said yes, and 17 per cent said they didn’t know. (On the day in question, BTC stood at $7,546 – about $1,100 less than where they were at the time of writing.)
One common crypto market prediction that has held water is that we’ll soon see central bank digital currencies (otherwise known as CBDCs for short) hit the mainstream. Just some of the countries that are actively pursuing digitising their currencies include China, France, Sweden, Turkey and the Bahamas. The European Union is also exploring the potential of CBDCs, and despite Washington scepticism, so is the US Federal Reserve.
All of this is likely to frustrate Mark Zuckerberg, the embattled CEO of Facebook. Back in June 2019, he had set out his bold vision to create a stablecoin – a digital currency pegged to a basket of traditional fiat currencies – that would enable payments to be made at a low cost around the world. Crypto market news from the time shows the level of resistance he faced. American politicians urged Zuckerberg to halt development until US regulators could assess the true impact of Libra, and whether it would undermine the dollar. He acquiesced in the end – but his company warned that such roadblocks could enable a more nefarious actor to gain supremacy in this space. Some sympathetic lawmakers also argued that stymying innovation risks leaving America at a disadvantage in a burgeoning new industry.
Facebook had hoped that, despite all this red tape, Libra would launch in the middle of 2020. Well, we’re in the middle of the middle of 2020, and it doesn’t look any closer to happening. Late last year, Zuckerberg had admitted to investors that the ambitious project may never launch at all. Keep an eye out for developments on this, as it could prove decisive in US fintech attempts to take crypto mainstream. Wider issues surrounding regulation are going to play a factor too – already, countries like Russia are planning to treat all crypto transactions as illegitimate. Undoubtedly, this would create huge headaches for the industry and the everyday consumers hoping to use it.
Top altcoins to trade
When it comes to the altcoin market cap, it is worth remembering that Bitcoin still has a chokehold over the entire industry. At the time of writing, the cryptocurrency’s dominance stands at about 63.7 per cent – and naturally, this can mean it’s often difficult for other coins and tokens to get a look in. Bitcoin has a market cap of $162.3bn at the time of writing – far more than the $93bn of all other altcoins combined.
It’s difficult to state what the most profitable altcoin is given how prices are continually fluctuating. But looking at their performance in 2019 can give an idea of the projects with momentum. Bitcoin clocked price growth of 87.3 per cent over the course of the year, and several altcoins managed to outperform it.
Binance Coin (BNB) soared by 126.6 per cent over the course of the year. The altcoin is a utility token offered by the Binance exchange that offers lower trading fees. Tezos (XTZ) – a cryptocurrency that fuels DApps and smart contracts – rose 184.36 during 2019. Last but not least, you have Chainlink (LINK), which ballooned 490.5 per cent over just 12 months.
If you’re wondering how to trade altcoins, it’s worth finding a reputable exchange that offers a generous amount of trading pairs with the niche coins and tokens you’re interested in purchasing. Turning a profit can be challenging, but there are cryptocurrencies that have a very low price correlation with Bitcoin. This means they’re less likely to incur substantial losses whenever BTC takes a sharp dive.
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