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Crypto in 2020 - fuel for the rocketship

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It's a new year and a new decade. The crypto industry is constantly in a state of change and therefore the only certainty is that tomorrow will look vastly different than today. It is what makes this industry exciting and offers great opportunities to capitalise on. Building on our note from August 2019 “5 reasons to consider adding the DCX10 to your portfolio” we look at what 2020 may hold. This breakdown is by no means exhaustive and had to be cut to be manageable. That in itself is bullish as it shows how much is happening in this industry.

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The Bitcoin halving 
The importance of this event cannot be overstated. In May 2020 Bitcoin will go through a programmed halving of the block reward allotted to the miners who maintain the network on which it runs. This means miners who contribute computing power to the security of the network will receive half the number of bitcoins for each block they successfully mine. In other words, the amount of Bitcoin minted per day is cut in half. This will put significant pressure on the supply and logic follows that the price should rise as a result. Important side note, Bitcoin Cash (BCH) has an expected halving in early April 2020 as well. BTC is 77% and BCH is 3% of DCX10. 

Bitcoin dominance 
Bitcoin’s dominance (percentage of total crypto market cap) is STILL touching 70 percent, going on 6 months now, a level not seen since April 2017 just before the previous crypto bull market when Bitcoin was overshadowed by the alternative coins (‘altcoins’). DCX10 gives you exposure to both BTC and altcoins - whether history repeats itself or not, you’re covered.

Facebook’s Calibra 
Facebook’s Libra project has had a few setbacks, from being grilled in front of the US congress to some regulators outright opposing it. The plan is to launch a wallet to store and transfer a stablecoin by June 2020. “Banking the unbanked”. While mixed reactions in the crypto community, an optimists take would be that it will surely bring more people and capital into the space.

Retail and institutional investors 
While we have yet to see the approval of a Bitcoin ETF, other cryptocurrency derivatives such as regulated Bitcoin futures are showing meaningful traction. Retail investors were also bullish. The retail payment app CashApp that offers Bitcoin saw record $148M BTC purchases in its third quarter. Investment platforms continue to add crypto to meet the demand by investors of all ages looking to gain exposure. 2020 should be no different?

“DeFi,” or “decentralized finance” 
Decentralized lending, derivatives, exchanges, prediction markets, etc. For now, a sector that has gained traction in DeFi is a way for people who are already long Ether or Bitcoin to earn interest. Will it attract new users to crypto assets if they are able to earn interest similar to fiat in a bank? Ethereum makes up 9% of DCX10.

 

 

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Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by Earle Loxton, CEO of DCX Capital (Pty) Ltd as general market commentary, and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.