Amid bad times, new solutions are required. That’s been well demonstrated the last chaotic year, where the uncertainty led too many people and institutions into the technology and cryptocurrency world, looking for alternatives. So, DeFi, Bitcoin, and cryptos enjoyed explosive growth in 2020, and they’re having very nice perspectives for 2021.
According to a recent study published by the crypto-analytics platform CoinGecko, if 2020 was a difficult year for humanity, it brought incredible opportunities for cryptocurrencies as well. For starting, the total cryptocurrency market capitalization increased by 308%+ till $732b (and now it’s over $1t).
The first five cryptos per market capitalization had nice returns. Ethereum (ETH) led the list with 472%+, followed by Bitcoin (BTC) with +303%+, and Polkadot (DOT) with 219%+. It’s worth to mention that other excellent performers last year were Monero (249%+), Cardano (378.7%+), and NEM (625%+).
As for the stablecoins, they recorded a 439% increase to $27 billion in circulation. DAI showed the most significant growth (2,698%+), but Tether (USDT) is still the leader with over 76% market share. Another good performer was USD Coin (USDC), with an over 652% increase.
For its part, Bitcoin was the best performing asset class in 2020, even above the Nasdaq composite, S&P 500, Dollar Index, gold, and crude oil. That’d be thanks to major accessibility, large institutional adoption, and the uncertainty caused by COVID-19 and the central banks’ loose monetary policy worldwide.
DeFi and cryptos explosive growth
Of course, 2020 was a great year for Decentralized Finance (DeFi) platforms and tokens. The “DeFi Summer” (June – August) saw a meteoric rise of DeFi dominance from 0.9% to 4.6%. By the end of the year, this market had around $20.4b in investments, and now even that figure grew to $23b currently.
As indicated by CoinGecko’s research, the average DeFi Price Returns the last year was 718%+. Yearn.Finance, UMA, and Loopring were the clear leaders, with over 2,788%, 2,423%, and 685% increases respectively. Other tokens, like Chainlink (LINK), Synthetix (SNX), and Compound (COMP) followed suit.
Now, amid the good news, it was also reported that the DeFi ecosystem lost around a total of $121m in hacking attacks last year. The higher victims were the platforms Pickle Finance ($20m), dForce ($25m), and Harvest Finance ($34m).
On the other hand, cryptocurrency exchanges’ total volume grew by 307%+, especially in December 2020. Bitcoin is on an upward trajectory now, and the cryptocurrency market, in general, shows good signs for the year ahead. As CoinGecko founders stated in the document:
“There are decades where nothing happens, and there are weeks where decades happen. 2020 was full of defining events that changed the course of the world. With the COVID-19 pandemic forcing many to digitally adapt, we believe that it is just a matter of time before our vision of global tokenization takes place”.
Featured Image by Steve Buissinne from Pixabay