The March crash, which happened due to the widespread quarantine in connection with the coronavirus, did not scare digital users away. After the rates of BTC and altcoins fell to a minimum, buyers returned to the cryptocurrency. Now the market is looking at the long term, because it is clear that the world economies will not recover instantly. This means that you need to look for opportunities to make money, or at least not to lose what is available somewhere in an alternative universe. If we talk about the prospects of the cryptocurrency market, then there is also something interesting if you look at the second half of 2020.
Ether: Network 2.0 must be disruptive
Over the past few months, the cryptocurrency world has been waiting for an important event – the launch of version 2.0 by the Ethereum Foundation. This is the most important factor supporting the ether , and it has not yet been fully realized. The company does not speak about the approximate time of full-scale test work, but they are expected literally from day to day. Now developers offer users to find weaknesses in a very, very truncated network functionality – to hack the blockchain, damage blocks, etc., that is, to determine the maximum number of vulnerabilities. Searching for these gaps in the network is expected to be rewarded with USD 5,000. This means that tests are still being carried out, but they are not taking place in full force. Hence, the Ethereum 2.0 network is still under development. This summer, a test version of the network may well be launched, and if all expectations are realized there, the air will definitely have a bright future. It’s just about expectations. Ethereum 2.0 is believed to address the scalability issue. Why is this important for the cryptocurrency perspective? The solution to this problem removes some of the links from the chain of calculations and, thus, makes the processes faster. The question is in the speed of computing: whoever is faster is more competitive. Now the average speed of the Ethereum network is 15 transactions per second, with progress in the field of scalability, they can be carried out up to 1,000 per second. So far, none of the major cryptocurrency companies have managed to solve this problem, but Ethereum has repeatedly spoken about its proximity to the optimal solution. Previously, a derivative protocol Synthetix and researchers from the Optimism group teamed up to test advanced scalability technologies in near-real-world conditions. At least that’s what Ethereum said. Within the framework of this project, Synthetix Exchange is also launched, a platform for issuing and trading synthetic assets. It should work on the basis of the Optimistic Virtual Machine, which is the second step in solving the scalability problem. In general, everything is quite complicated both technologically and ideologically, but this is the point. In addition to scalability in the Ethereum 2.0 network, other long-standing problems will be solved. For example, regarding the Proof-of-Stake algorithm, which will allow you to have passive income on average 3.2% per annum. In addition, with the transition to 2.0, Ethereum expects to improve the security and privacy aspects. In general, it should be something completely breakthrough and unparalleled. If so, then with the launch of Network 2.0 in the second half of the year, ether will have a long-term and strongest fundamental reason for the growth of the rate.
Bitcoin: it’s important that everything is calm in China
The likelihood of a new wave of coronavirus does not scare investors about the prospects of the cryptocurrency market as much as its possible consequences. Asia is now the focus of the long-term investor’s attention, and here’s why. There are a large number of mining farms in China, as well as various types of mining equipment production. The share of Chinese miners in the total volume of miners in the world is still very high. The risks of a new virus emerging – or a second version of an already known one – in China potentially means the closure of mining farms. The good news is that such an enterprise itself works extremely autonomously, and therefore, in order to really need to close it, a really serious danger is needed. There is no such news now. In addition to the bright speculative factors, which for the most part lie in the theoretical plane, the market has more and nothing to move in BTC. Every now and then, news flashes about either wallet hacking or colossal bitcoin transactions . But this is not at all something that could move the course of the flagship cryptocurrency in one direction or another. What could be such a catalyst and influence the prospects for cryptocurrencies? For example, the SEC’s decisions on the status of a cryptocurrency that could officially be considered a currency or an asset. Then the mainstream American banks would include BTC in the list of currencies available for transactions. As you know, the closer bitcoin is to real life, the better – more potential users will have access to cryptocurrencies. But with the pandemic and quarantine measures, the topic of considering the cryptocurrency and its status at the SEC level faded into the background. Maybe the regulator will return to such work a little later, but it is very doubtful that this will happen before the onset of the fourth quarter. The halving in the bitcoin network in the spring did not become a powerful lever that could raise the rate of the flagship cryptocurrency. On the one hand, this was expected and therefore taken into account in advance in the BTC quotes, on the other hand, the event was superimposed on the pandemic and turned out to be blurred in terms of the degree of influence. If the fight against coronavirus in the world goes according to a positive scenario, and the planet manages to avoid a new wave of infections, the bitcoin rate will have a chance to grow to 11,000-12,500 USD by the end of the year. If the world is covered with a new series of diseases, the BTC rate may fall as rapidly as the S&P 500 index can fall in such a situation. It is at the moments of sales that the connection between Bitcoin and the S&P 500 is well traced.
Efficiency: the leaders are the same
According to the results of the first half of the year, the top 3 most effective and promising cryptocurrencies looks expected: these are BTC, ETH and Cardano. The latter increased in price by 178%, BTC – only 44%. It is quite possible that in the second half of the year the leaders’ rating will be exactly the same. The ether can have a growth impulse due to the fundamental driver, while the rest either move in accordance with the general mood, or play out the internal history. As for the prospects for cryptocurrencies, a lot will depend on the development of the situation and the release of news. Whether cryptocurrencies will be able to gain a foothold as the same means of payment as traditional fiat currencies, we will find out in the near future. This factor can give a powerful impetus to the development of the cryptocurrency market. For now, you just need to keep your finger on the pulse and watch what is happening in the world.