Photo by Ambreen Hasan on Unsplash
Everybody’s making predictions about 2020, mostly about the price of bitcoin.
That one’s easy—it will hit $38,000 by the end of the year. Everybody knows that.
Here are four more predictions for 2020, including one prediction nobody’s even thinking about.
Crypto will go mainstream in the U.S.
In 2020, we will for the first time see cryptocurrency go mainstream in the world’s largest economy.
No, I’m not talking about another 2017-esque four-month-long hype-fest.
I’m talking about Wall Street, government regulators, the government itself, and your friends starting to treat cryptocurrency like a real technology, not a niche gambling market for nerds.
People might even pick up Consensusland so they can see how government can use cryptocurrency for public good and get a sense of the challenges and consequences of doing so.
This boom in awareness will happen for three reasons.
1. Wall Street has a reason to care about crypto.
They have regulated financial products, competent custodians, a clear legal framework, and new ways to make money off of people’s interest in crypto.
Do you think they will keep this good news to themselves?
They’re already getting institutional investors and large, private accounts involved. Grayscale Bitcoin Trust sits among the top 5 equity holdings for millennials and some of the biggest Wall Street brands now own crypto-specific subsidiaries.
You will start hearing about it once sentiment from enough “traditional” investors has shifted to positive. As that point, your rich uncle, your cousin in finance, and a TD Ameritrade ad will mention bitcoin as part of a well-balanced investment portfolio.
2. Businesses are Doing useful things with Blockchain technology.
Ernst & Young developed code for private ethereum transactions. Microsoft is working on an identity verification protocol using bitcoin’s blockchain. Deloitte uses STORJ for its blockchain-in-a-box product.
JP Morgan created its own cryptocurrency. Factom secured another U.S. grant for blockchain-based security.
The World Bank issued its first blockchain-based bonds.
VeChain secured Walmart China, DNV TL, Norway in a Box, Haier, the city of Shanghai, and several other large companies as customers. Not “partners” but actual, real-life users.
Ripple continues expanding.
You can Google many, many other corporate uses of cryptocurrency. Each implementation gives the mainstream another touchpoint with crypto.
3. Cryptocurrency has gotten more legitimate.
Central banks have started exploring whether to create their own cryptocurrencies. The Marshall Islands actually did.
Some countries now allow financial companies to create and hold blockchain-based assets.
US regulators approved the first-ever U.S. ICOs and cleared new crypto-based financial products. FINRA, the finance industry’s watchdog, published a cryptocurrency website. Congress introduced 26 crypto-related bills this session (so far).
China and UAE announced massive investments in cryptocurrency, er, I mean, “blockchain” and “digital assets.”
All these things happened in the past, but in 2020 average people will actually start hearing about them, because . . .
Wall Street and Big Business Will Take Over the Blockchain Industry
In the U.S., at least.
No need for me to tick off a list of all the businesses that quietly created crypto subsidiaries or blockchain teams.
Likewise, I won’t name-drop the former regulators and legislators who now work as advisors and consultants for crypto companies and pro-crypto lobbying groups. As with the list of businesses using blockchain, you can Google all that.
Did you know VCs invested over $4 billion into cryptocurrency projects during 2018 and 2019? One source puts this number as high as $16 billion.
That’s peanuts for the VC biz but it’s a huge amount of money for the fledgling crypto industry.
In 2019, Wall Street firms spun off DeFi projects. Fintech pros bootstrapped crypto lending platforms while Binance opened a U.S.-compliant exchange and a crypto lending platform.
U.S. regulators issued clear guidance and worked constructively with the crypto industry to clean up the mistakes of 2017. Wyoming created the first legislative framework for cryptocurrency development.
One step forward . . .
All these things make it easier for businesses and financial professionals to make money off of cryptocurrency. Do you think they’ll suddenly give up because bitcoin’s price only went up 100 percent last year?
As they grow, they’ll tell people about what they’re doing. They may use facts and data to convince people they’re legit (or at least not crazy for doing crypto). They’ll probably continue to expand their professional networks.
But to where?
If you’re scared of big business and Wall Street, join the club.
It’s a two-edged sword. Cryptocurrency and blockchain developers will benefit from all this activity.
After all, the internet boomed after Congress handed it to the telecom companies. Why would we expect a different outcome for cryptocurrency?
At the same time, this shift will change crypto as we know it. Read Bitcoin or Bust: Wall Street’s Entry Into Cryptocurrency to get some sense of what’s coming.
Your Friends and Family Will (Still) Not Care About the Technology, Only Prices
You might read these predictions and think they’ll lead more people to buy bitcoin, but it won’t work that way. Nobody cares about what we care about.
Open, public, borderless, neutral, censorship-resistant financial systems? “Umm…what?”
Inverted yield curves, undercapitalized banks, violations of their privacy and human rights? “Pssh, that would never happen in MY country.”
Bitcoin will make you rich? “Nah, man, it always crashes.”
Protect your money from government debasing your currency? “Cool, I can hide my wealth with bitcoin, can you hook me up?”
As a result, most people will not buy crypto simply because businesses, investors, and governments think it’s good.
We have many legit, mainstream technologies. Yet, you probably don’t know anybody putting time or money into any of them. Why would they treat bitcoin any differently?
Once bitcoin hits all-time highs, though . . . then you’ll see them change.
“Wait, this thing can finally make me money again? Hook me up, Mark!”
Except instead of hearing only you say anything positive about crypto, they’ll have a bunch of professionals with business suits, certifications, degrees, and a Wall Street firm listed under their LinkedIn profile reminding them of all the great things I mentioned above.
By the end of 2020, their friends and financial advisors will tell them “bitcoin’s a safe, regulated asset now. Lots of businesses use cryptocurrency. Put a little money in—maybe 1 or 2 percent of your paycheck. After all, you never know, right?”
(But they will not buy any until 2021.)
The Halving Will Not Matter
Some people think the halving will get people juiced up for bitcoin. After all, you when you cut the new supply of bitcoin in half, it means prices have to go up, right?
Unless people continue to buy and hold bitcoin, it won’t matter how much miners get for each new block.
As with the two other halvings, this third one will be a non-event.
In 2012, bitcoin’s price stayed mostly flat before and after the halving. It took two months for prices to go up again.
In 2016, bitcoin’s price actually dropped 36 percent before returning to the pre-halving level about 4 months later.
Set your expectations accordingly.
Why I can’t wait for 2020
In 2019, I got my feet wet. I published two books, started a website, and got some of my stuff picked up in other outlets (special thanks to Hacker Noon for opening its platform to me).
This year, I plan to publish a series of articles about how we talk to “normal” people about cryptocurrency. Probably once every 3-4 weeks until I run out of things to say.
I’ll also write about some interesting projects using crypto to tokenize real-world assets and share my thoughts about how this crazy world of crypto keeps evolving.
May even start YouTubing if I can ever justify setting aside time to create videos. When you have kids, day job, housework, family, friends, and “normal life” tugging at your schedule, every minute matters!
On January 31, I’ll head to Capitol Hill for the first time in 12 years for the Government Blockchain Association’s big conference, The Future of Money, Governance, and the Law. Of course, I’ll share some reflections from the event. Drop me an email or tweet with questions or anything you’re interested in hearing about!
Thank you for reading my posts and books. I’m humbled by your interest and appreciative of your support. I have a small voice in this space, but it’s growing. It feels great to know you’re growing with me.
Enjoy 2020, all. Could get crazy in the cryptosphere.
As always, relax and enjoy the ride!
Mark Helfman is a top writer on Medium for cryptocurrency, finance, and bitcoin topics. His book, Consensusland, explores the social, cultural, and business challenges of a fictional country that runs on cryptocurrency. In a past life, he worked for U.S. House Speaker Nancy Pelosi.