It might be an odd time to do a “cryptocurrency and fintech trends 2020” kind of post. But, nearing the end of Q1, we come to an interesting standpoint from which to judge the rest of the year. Because, frankly, who would’ve or could’ve predicted the mess we’re in by March 2020 back in January or December?
With a global pandemic ravaging the world, BTC dropping wildly, most cryptocurrencies following it, and the gravity of an unexpected crisis, there also emerges opportunity across many industries. We thought it was a good time to do a recap of the 5 trends that we should watch out for in crypto and fintech for the rest of the year.
After all, while usually skeptical of everything status-quo, the crypto industry isn’t fully immune to the developments of the day. We already looked at how coronavirus will affect crypto in the short run, now it’s time to take a look at the 5 trends for fintech and crypto to watch out for in 2020.
1. Seamless and Improved Payments and Transactions
When the stock market crashed last week, most platforms experienced downtime, horrendous waiting times, and tons of user frustration. The reasons vary, but the bottom line is that no one expected the trading activity to spike up so suddenly. Just on Thursday 12th, ETH transactions hit $564,000, which is the maximum of the year thus far, and also the highest day since February 2019. As another example, Tezos exceeded $500,000,000+ in trade volume (their all-time record) during the same 24 hours.
As it is natural in tech, the sudden surge of traffic probably evidenced some points of failure or weaknesses within each system’s architecture. It would come as no surprise then, that the crypto world, in general, will make it out of this with a few updates in the way of making payments and transactions.
While probably not a direct cause of this, it was timely that just a day after the big crash of Thursday Coinbase rolled out their bitcoin transaction batching feature. This allows the batching of multiple transactions at once, reducing the load of the network, and thus lowering the fees by up to an alleged 50%.
Even at the beginning of the year, fintech magazine spoke precisely about improved biometric technology and seamless payments on demand when they listed out their 5 fintech trends for 2020.
2. Traditional Institutions Increase Blockchain Adoption
Blockchain adoption has clearly been on the rise since the last years. But now, the uncertainty brought on by coronavirus will certainly make more industries, investors, and individuals look to new technologies and alternative forms of currency for the recovery of the ongoing financial crisis.
Although it’s still early to see how the current environment will alter cryptocurrency adoption, 2020 has certainly brought on some big news in the matter. For example, take Toyota recently announcing a Blockchain Lab in order to become a “Mobility Company” that will provide a wide-ranging transportation platform. Also, there was the recent news of Walmart and the other six major conglomerates joining the open-source blockchain consortium Hyperledger.
3. States turn to Digital Assets
Furthermore, increased adoption will most likely continue at the state and government level as 2020 limps on. Weeks, or even days, before the outbreak, we saw huge developments like Australia recognizing cryptocurrency as collateral to secure legal expenses, France recognizing bitcoin as a legal form of money, or Germany giving bitcoin legal status.
Government institutions worldwide are giving nods to crypto, and it’s likely that the global pandemic will not be a hindrance to this trend, but perhaps even an enabler, as many crypto enthusiasts currently hail.
After all, even before 2020 came barging in, many countries had already announced plans for a regulated state-issued cryptocurrency. Now, the list of countries wishing to move towards the digital realm when it comes to financial activity will likely get longer. As it stood even before the global pandemic, some central banks were already dabbling in digital currencies.
4. The Rise of Cryptocurrency-Backed Loans
Another cryptocurrency and fintech trend for 2020 is the use of digital assets as collateral for debt, and crypto lending in general. We already mentioned the case of Australia recognizing crypto as collateral in courts, and after the events of last week, crypto lenders were among the few industries to benefit massively from the price drops. With people scrambling for liquidity in the face of these tough times, loans in crypto are sparking up, carrying higher interest rates than ever.
As it stands, crypto lending activity from firms like Genesis Capital, Nexo, and Celsius was already ramping up in the past year. Some of them have become increasingly popular for allowing holders to earn a yield on their assets. Furthermore, the ongoing uncertainty with most markets makes the liquidity of digital assets a coveted thing by these types of firms. Thus, crypto lending will become an increasingly popular thing among all sorts of agents in need of capital.
On another note for crypto and digital loans, CB Insights mentioned the rise of digital lending platforms in Latin America and the Caribbean on their list of Fintech trends for 2020. Several lending startups are popping up in the region catering to the undeserved and small businesses. As we crawl out of the current crisis, 2020 might show that the market for digital lending will increase not only in those countries.
5. Increased Adoption in Mainstream Marketplaces
Finally, one of the major trends for crypto in 2020, and many previous and future years for that matter, is the proliferation of its use in common marketplaces. It has become increasingly common for eCommerce sites, vendors, and even some physical points of purchase to accept crypto. Now, after the outbreak, shopping with bitcoin over the internet is actually getting a boost thanks to so many people doing the right thing and practicing social distancing.
That piece of news came just a few days before the announcement of the Coinbase Visa Debit Card, getting linked to Google Pay, for example. The debit card had been made available in the UK since April 2019 and hasn’t stopped gaining adoption since. Of course, it’s only one of the frequently-sparking options to spend crypto from an exchange via a physical card.
Now, with more people recommending paying with a card over dirty and bacteria-rich cash, or better yet, staying at home and shopping online, it’s fair to say that we’ll see this trend get more and more use cases during the rest of 2020.
Keep Your Eyes Open
We came up with this list of cryptocurrency and fintech trends 2020 by staying alert to what industry professionals and analysts were publishing at the beginning of the year. Also, by noticing how this related to the general response to coronavirus and the price drops shown by those industries. Naturally, none of the predictions or suggestions here should be taken as financial advice and we always recommend doing your own research.
What’s your take on where will all these trends lead us by November or December? Feel free to let us know in the comments below.