10 Events that Shaped Crypto in 2020
By: Gains Associates
Tags: 2020, Gainsarticle, Review, Year In Review, Cryptocurrency

2020 was a strange year. The world was hit by a pandemic, bushfires swept across Australia and President Donald Trump of the USA was impeached. Despite all the craziness going on in the world as the pandemic raged on, cryptocurrency had one of its finest years in recent history. Let’s take a look at the main events that shaped 2020.

CFTC, the Regulator strikes

In October, BitMEX, the leading derivatives exchange, was caught in the CFTCs net as its founders and executives were charged with operating an unregistered trading platform and violating multiple CFTC regulations, including failing to implement required anti-money laundering procedures. Following this, CEO Arthur Hayes stepped down along with the other top executives who were charged. It’s interesting to note that the scam wicks that were synonymous with Bitmex prior to CFTCs involvement have become a thing of the past. If only the CFTC had struck in February, then we wouldn’t have had Black Thursday in March.

Black Thursday, March 13

In March 2020, the coronavirus was in almost every country and the WHO recommended nationwide lockdown in all countries. This triggered a dump of all asset classes and Bitcoin wasn’t spared. The sudden fall was led by BitMEX, with Bitcoin price dropping to a low of $3,600 on the exchange before it was closed for “maintenance.” Ethereum wasn’t spared as it also went down to around 80$. Did you buy the dip?

Institutional Interest

As the streets turned red, and retail investors were calling for $1000 Bitcoin, institutions were buying. Square, Inc. purchased approximately 4,709 bitcoins at an aggregate purchase price of $50 million. PayPal also launched a new service enabling users to buy, hold, and sell cryptocurrency. As of December 22nd, MicroStrategy had spent $1.125 billion on bitcoin, at an average price of $15,964 per bitcoin, unperturbed by Citibank downgrading its ratings over its “disproportionate” Bitcoin focus. A number of celebrities were also vocal a about Bitcoin. One such person whose tweets caused a stir on Crypto Twitter was Game of Thrones star, Maisie Williams.

ETH 2.0

Plans to move Ethereum from a Proof of Work coin to Proof of Stake began to take shape in 2020. The upgrade to its underlying network was known as Ethereum 2.0. The crypto community was excited about this and its ability to reduce the amount they spent on fees, which skyrocketed as a result of the DeFi boom. However, the final version is months away.

If you are curious to know how much you wasted on fees over the past year, visit fees.wtf. Share your stats in the GAINS Associates Telegram group.

The Bitcoin halving

Bitcoin had itS 4-year halving cycle complete in May 2020. The reward per block mined on bitcoin’s blockchain was reduced to 6.25 BTC from 12.5 BTC at 19:23 UTC, when the cryptocurrency was trading near $8,500. Many expected a post halving dump followed by a rise but it seems Bitcoin had other ideas of its own.

New Bitcoin ATH

Bitcoin hit a new all-time high, the highest since January 2018 as it blew past $20k. This represented a 190% since the start of the year and nearly 440% from the lows reached in March 2020. The number 1 cryptocurrency ended the year at $29,000.

Ripple SEC lawsuit

SEC sued Ripple and its leaders, with Ripple’s CEO opting to turn down the SEC settlement offer and elected to fight charges instead. The lawsuit sparked delistings across top exchanges including Coinbase and Binance US. Bittrex also delisted Ripple and even went further trying to test their relevance in the current market by delisting some privacy coins. The fact that the market was not moved and that they are not being covered extensively in this article gives an indication of what the answer was.

Rise of DeFi

Decentralized Finance has been around for a while, but it was in 2020 that it came to the fore. DeFi tokens made incredible gains on the market. The most popular one was Yearn Finance, which rose from practically single-digit figures to trade at $40k per coin. Other blue-chip DeFi projects that came into the spotlight around this time were AAVE and Compound. AAVE, formerly $LEND, went down 99% during the bear market before recovering over 3000% to lead the DeFi boom.

From May to December 2020, the total value locked (TVL) in decentralized finance projects rose a whopping 2,000 percent, ending the year at $15B.

SUSHI, Nomichef and SBF

Sushi , a fork of Uniswap was launched in August 2020. The anonymous dev behind the clone, known as “Chef Nomi” sold $8 million worth of SUSHI tokens causing the token price to collapse. FTX exchange CEO Sam Bankman-Fried, swooped in like Prince Charming to save SUSHI. Eventually, all the funds were returned to the developer fund. SUSHI survived and everyone lived happily ever after.

Binance SAFU funds in action

Well not everyone. To crown off the year we had Binance dip into the SAFU insurance fund to compensate clients who suffered losses from the Cover Finance exploit, which caused prices to sink from around $737 to $26 within minutes

Indeed the whole event was comical as they suffered an infinite minting attack, causing losses to COVER holders. Later on, developers of Grap Finance confirmed they were the originators of the hack. They returned the funds with an auspicious message that read urging users to “take care of their shit”.

The last time Binance took from the SAFU fund was in 2019 after it suffered a hack. This year though, it was KuCoin that was targeted in September.

There were other hacks, like bZx that was targeted twice, even after 3 security audits. Harvest Finance and Warp Finance are some others that fell victim to hacks.

We became so accustomed to the hacks that the crypto companies decided to be the hackers themselves and came up with rug pulling. Some projects built in back-doors into contracts to steal funds, and this was very prominent among coins that were named to satisfy our thirst for fluids as well as our thirst for money, like YAM, Pizza, Hotdog, and any food item you can think of.

All that was missing was a Nigerian Prince creating ‘Eba’ Swap and the year would have been complete. Maybe we will have that in 2021. Just Maybe.