The third big bitcoin (CCC: BTC) “halvening” happened in May, and consistent with our very own Matt McCall — whose Ultimate Crypto portfolio has averaged a jaw-dropping 40% gain in 2020, against a market that’s flat year-to-date — that’s an enormous reason to be bullish on cryptocurrencies in 2020.
But, before we jump into understanding what that halvening is (also mentioned as a “halving”) and which cryptocurrencies to shop for 2020, let’s first understand why cryptocurrencies as a broad asset class have a bright future.
The core purpose of cryptocurrencies is comparatively simple: leverage technology to eliminate the middle-man in financial transactions and make buying and selling things less expensive and more efficient.
Through the blockchain — a decentralized public ledger of transactions that anyone can view is consistent across the entire network and is unable to be edited and/or updated unless the entire network agrees with the update — cryptocurrencies are ready to conduct and verify financial transactions without having any central oversight.
That may sound sort of a mouthful. It’s not. Traditional currencies need big banks to oversee and verify all transactions. Cryptocurrencies don’t. this suggests they’re less expensive and more efficient than traditional currencies because there’s no middle-man to pay and no paperwork to fill out.
Sure, there are risks to cryptocurrencies achieving mainstream adoption and overtaking government-backed currencies. But, lower transaction costs and quicker transactions are large enough value props to warrant there being a bright future for cryptocurrencies (even if they don’t take over the world).
Why the Halvening Is Bullish
Now, let’s take a deeper check out why cryptocurrencies will keep rising 2020.
Two key characteristics of bitcoin are limited supply and constrained supply growth.
There are a hard and fast number of bitcoins within the world (21 million). The bitcoin world started with most of these bitcoins being “locked within the system.” whenever a private updated bitcoin’s ledger (also called “mining”), the individual would unlock new bitcoins. But to constrain supply growth and retain incentives for mining, the bitcoin system is about up in order that every so often, the number of latest bitcoins unlocked for mining a block is halved.
So far, bitcoin has undergone three halvings. After the primary halvening in 2012, bitcoin prices rose about 8,000% over the subsequent 12 months. After the second halvening in 2016, bitcoin prices rose about 2,000% over the subsequent 18 months. In both instances, many various cryptocurrencies actually rose much more than bitcoin.
In other words, bitcoin halvings have traditionally been exceptionally bullish catalysts for cryptocurrencies. which makes complete sense. Prices are determined by supply and demand. If supply growth slows, and demand growth doesn’t, then prices should go up.
The third bitcoin halvening happened in May 2020.
The number of bitcoins unlocked for mining one block fell from 12.5 bitcoins to 6.25 bitcoins. due to this halving, bitcoin’s supply is predicted to rise by just 2.5% in 2020 — a rock bottom for the cryptocurrency. It’s expected to rise by but 2% in 2021.
Concurrently, demand growth should accelerate in 2020, driven by the introduction of more financial derivative products, broader support from central banks and increasing recognition of bitcoin as a digital store useful.
Bigger demand growth plus lower supply growth equals higher cryptocurrency prices. That’s largely why Matt McCall, who has already picked two 70%-plus altcoin winners this year, thinks that the simplest of the large 2020 cryptocurrency rally remains before us.
With all that in mind, I suggest readers keep an in-depth eye on these seven explosive cryptocurrencies within the coming year:
- Bitcoin (BTC)
- Zcash (ZEC)
- Ripple (XEC)
- Basic Attention Token (BAT)
- Chainlink (LINK)
- Synthetix Network Token (SNX)
- DxChain Token (DX)
Cryptocurrencies to shop for 2020:
Of course, the foremost obvious cryptocurrency to shop for 2020 is bitcoin. Over the subsequent few months, bitcoin is going to be an immediate beneficiary of slowing supply growth and accelerating demand growth across the cryptocurrency world.
On the availability side, the third halving directly affected the number of latest bitcoins coming into the market and led to relatively slow supply growth.
Meanwhile, on the demand side, cryptocurrency interest will soar this year after the halving drew media coverage and public attention. Bitcoin demand simply is that the “gateway” into cryptocurrencies for brand spanking new investors. That is, as new investors enter the cryptocurrency market over subsequent few quarters, most of them will likely start by getting their feet wet with bitcoin.
Accelerating demand growth plus constrained supply growth will cause higher prices for bitcoin in 2020.
Privacy may be a top priority within the cryptocurrency community, and privacy-focused coins will likely win big in 2020. That’s why McCall has picked top privacy coin Zcash together of his top altcoin investments for 2020.
Zcash, which is one among McCall’s favourite altcoins in his Ultimate Crypto portfolio, maybe a pure-play on the growing importance of privacy in cryptocurrency.
That is, the primary wave of cryptocurrencies was all about decentralization …
“Existing currency valuation models don’t quite take into consideration decentralization — a potentially distinguishing feature of cryptocurrencies,” says Professor William Cong of Cornell University.
Now that cryptocurrencies have gained more mainstream traction and are beginning to exhibit endurance, it’s time for an additional distinguishing feature to emerge — privacy. Privacy is one among the more important and discussed characteristics in both the crypto world and therefore the financial transaction world at large.
As the importance of privacy grows within the crypto world, privacy coins will outperform, and Zcash looks particularly primed to outperform given the company’s recent pivot into private mobile transactions.
A leading altcoin positioned for potentially big gains in 2020 is Ripple.
Ripple may be a company which leverages blockchain technology to enable banks, payment providers, digital asset exchanges and corporations to send money globally, usually using the company’s cryptocurrency, XRP.
In some ways, then, Ripple is that the infrastructure behind cross-border cryptocurrency payments.
As cryptos gain more mainstream traction, Ripple is adding more and more banks and various other customers to its network. last, the commercial bank of Egypt just partnered with Ripple.
More and more banks will partner with Ripple in 2020 as cryptocurrency awareness and demand rises. because it does, the worth of XRP will rise, too.
Basic Attention Token (BAT)
One of the more interesting cryptocurrencies that would explode higher is Basic Attention Token.
The core idea behind BAT is pretty simple. The digital advertising model is broken, therein user and advertiser incentives aren’t aligned. Instead, they run opposite each other. That is, advertisers want users to observe their ads, while consumers want to skip the ads.
The idea of BAT is to realign the motivation structure within the digital ad network in order that user and advertiser incentives match each other.
To do this, users get paid Basic Attention Tokens to observe ads within the Brave browser, in order that they’re now financially incentivized to observe the ad. the top goal, of course, is that more consumers watch ads, and advertisers sell more product/generate more brand awareness.
It’s a reasonably smart business model.
And, as cryptocurrencies gain more mainstream consumer traction in 2020, this smart model for compensating users to observe ads should similarly gain traction. because it does, the worth of BAT should rise.
One of the most well-liked cryptocurrencies, and one which Matt McCall thinks will remain hotdog for the foreseeable future, is Chainlink.
In his Ultimate Crypto portfolio, Matt first recommended Chainlink in early January at a price of $2.09. Today, Chainlink trades hands at $5.84 in only seven months. What’s more, that return over the past five months, follows a 450% return in 2019.
In other words, Chainlink has been scorching hot. Strengthening fundamentals imply that it’ll remain hot for the foreseeable future.
Specifically, Chainlink leverages blockchain technology to make smart contracts, which are essentially self-executing contracts which will be executed without central oversight.
But businesses are slow to adopt smart contracts because data is integral to executing these smart contracts, and there haven’t yet been reliable thanks to connecting external data with the smart contract.
That’s exactly what Chainlink does. So, they supply a really necessary gateway to inaugurate the broader adoption of smart contracts. This adoption uptake in 2020 will provide a natural tailwind for LINK, and therefore the coin’s red-hot rally will likely persist.
Synthetix Network Token (SNX)
The Synthetix Network Token may be a cool platform within the ethereum ecosystem which leverages blockchain technology to assist bridge the gap between the usually very obscure cryptocurrency world, and therefore the much more tangible traditional asset world.
That is, within the Synthetix Network, there are Synths, which are synthetic assets that provide exposure to assets like gold, bitcoin, U.S. Dollars and various equities like Tesla (NASDAQ: TSLA) and Apple (NASDAQ: AAPL). the entire idea of those synthetic assets is to make shared assets wherein users enjoy asset exposure, without actually owning the asset.
It’s a singular idea and a promising project within the ethereum landscape. Because it helps bridge the gap between cryptocurrencies and traditional assets, it creates A level of familiarity and value that are often missing in other cryptocurrency assets. This familiarity and value ultimately position SNX price to rise in 2020.
DxChain Token (DX)
On the smaller side, a cryptocurrency which seems like a stimulating speculative buy is DxChain Token.
DxChain may be a very ambitious project which aims to use blockchain technology to unravel the world’s data computation, storage and privacy issues. It’s a large order. But, if it works, it could yield huge leads to terms of DXC usage and value growth.
In 2020, data privacy concerns are front and centre. As such, privacy-focused coins should rise. DXC is one among the more interesting privacy-focused coins with potentially huge future upside.
While it’s still all very speculative, those attributes may make this altcoin well worth the risk over subsequent few quarters.
In the bigger picture, it’s not an irony to mention that the chance in cryptocurrency in 2020 may be a once-in-a-lifetime event.
New technologies are often undergirded by periods of rapid, exponential growth … before either dying call at supernova fashion or normalizing to satisfy realistic expectations. So when cryptos had their first “once-in-a-lifetime” event in 2013 — which turned every $1,000 into $93,000 — the spectating world thought that they had omitted.
Then came a subsequent life-changing event in 2017, turning every $5,000 into $123,000 … that was assuredly the large boom that you simply either rode to 25x gains or, well, you didn’t, right? Wrong.
Cryptocurrencies are unlike any trend we’ve ever seen before, and there’ll be another opportunity for investors to show a fistful of dollars into many dollars.
The key to the present explosion is that the Halvening. Don’t miss out this time!