Growth of cryptocurrency - still going strong in the time of crisis
Crypto coins have gone through a rough patch in the last few months with a lot of global factors affecting the growth in cryptocurrency. But after going through a somewhat rocky road in the last months of 2019 and the tumultuous first quarter of 2020, things are starting to look up for the cryptocurrency market. Find out how Bitcoin and other remarkable altcoins have performed in the year’s first quarter and what factors affected their growth. You can also play Bitcoin games here.
The Quarter 1 (Q1) 2020 performance of cryptocurrencies
The first three months of 2020 saw a bearish run on some of the top coins in the market. Lots of factors may have affected this drop but the global crisis brought by the coronavirus pandemic proves to be the main reason. Check out below the cryptocurrency growth chart and how the market’s top coins performed in the first three months of the year.
Bitcoin projected growth and performance
For the first time since September 2019, Bitcoin’s price breached the $10,000 ceiling in February 2020 at $10,300. February was a great time for Bitcoin with its price never going below $8,000. But the glorious time for the digital gold didn’t last for another month.
In the following month, Bitcoin’s price went downwards. In the second week of March, it fell from $7,900 to $5,800 in just a day. Eventually, it reached its lowest price when it dipped into $4,900 territory. The last time Bitcoin went below $5,000 was during the first quarter of 2019. It went as low as $3,200 back then. But fortunately, Bitcoin saw a continuous rise in price come April 2020. Here is the cryptocurrency growth chart for the first quarter of the year.
Bitcoin Price Chart Quarter 1 2020
After the dip in March, Bitcoin regained momentum in April and bounced back on its feet. The Bitcoin growth rate continued its upward streak up till May, almost going past the $10,000 mark again on May 9 at $9,917.
One reason as to why BTC’s price keeps climbing is due to the halving event that happened on May 11. This event occurs every four years where the price received by miners for every verified block is reduced to half. From 12 BTC, the block reward became 6.25 BTC. Before the halving day, lots of people buy Bitcoin since this event usually causes the price to rise in the long-term. As a result, the Bitcoin projected growth is expected to skyrocket in the near future.
Ethereum projected growth and performance
Ethereum started the year at $128, carrying the $130 in the last days of December 2019. January was a good month for ETH, with its price continuously rising until it peaked at $186 by the end of the month. Much like Bitcoin, Ether enjoyed a good run in February. It continued the short bullish run in January and breached the $200 mark at $284.
However, ETH wasn’t spared from the price drops in March. It suffered from continuous drops since the first day of the month and by the second week, Ether’s price plummeted to $107. It finished the month with a hopeful $133.76. April proved to be a better month for Ether. The price started climbing again until it reached $215 by April 30. The Ethereum projected growth is expected to follow the trajectory of Bitcoin’s price.
Ether Price Chart Q1 2020
May has been steady so far, with the price rising past the $200 mark. It’s been dropping and rising back to the $215 territory but generally follows an upward trend.
Litecoin projected growth and performance
Litecoin began the year consistently, with almost the same price it had by the end of 2019. Its prices in January ranged from $39 at the lowest to $68 at the highest, almost doubling in value by the end of the first month. February saw a steadier growth in LTC’s price. From $64 at the start of the second month, it rose up to $84 by February 15. It remained in the $70 territory until it started dwindling down to $60 by the last days of February.
By the time March began, LTC’s price sat at $59. It managed to climb a few dollars in the first week but when the second week began, its price dropped until it descended to $32 on March 15. But that was LTC’s lowest price in the past three months, and it’s been regaining momentum since the March drop.
Litecoin Price Chart Q1 2020
Litecoin has been steadily growing in the first two weeks of May, almost reaching the $50 mark. Currently, LTC sits at $45 and with the steady rise of Bitcoin, its upward climb can be expected as well. The Litecoin projected growth often mimics Bitcoin’s but at a more steady pace.
Ripple projected growth and performance
Ripple is the world’s third-top cryptocurrency based on market capitalisation but its price has always been unassuming. Its native coin XRP has never hit $1 ever since its creation. That may be a piece of bad news to some, but XRP’s low price has never been much of a problem as evidenced by its market cap of $8 billion. The coin’s lower-than-a-dollar price doesn’t stop Ripple from achieving its vision of faster and cheaper transcontinental money transfers.
Ripple XRP began the year with a $0.19 and experienced a growth spurt throughout January until it ended the month strongly at $0.24. February was even more fruitful with XRP reaching $0.33 on February 15. This did not last long, however, and the price dropped back to $0.29 after two days. It continued on a downward path and ended the month at $0.23.
During the first two weeks of March, XRP remained steady above the $0.20 mark before dropping to $0.15 on March 13. After two days, its price dropped even lower to $0.13. That lasted for a day before XRP slowly climbed out of its dip and attempted to go back to the $0.20 mark. March ended with XRP’s price at $0.17.
XRP climbed steadily throughout April, its price always within the $0.18 and $0.19 range until it reached $0.22 by April 30.
Ripple (XRP) Price Chart Q1 2020
Currently, XRP’s price is at $0.20 and since May started, it’s been switching back and forth from $0.19 to $0.22. The Ripple projected growth is expected to maintain its position within the $0.18 to $0.24 territories.
What the data says on cryptocurrency growth rate
Comparing the data for each coin, we can see a similar pattern. They all climbed and dropped at similar dates. The cryptocurrency growth rate follows a similar pattern. They reached their highest prices on February 15 and a few weeks later, experienced their lowest price drop on March 17. After the crash in March, all coins steadily regained higher prices throughout April.
If the coins’ charts follow through on the current upward trend, we might see a long-term bullish run in the crypto market. Now that the world is going through a medical, financial and economical strain, there’s no better time for digital assets to perform their best and prove their reliability. When traditional markets are in a panic, how will the new, alternative markets react and perform? How will they aid countries facing financial and economic problems?
What caused the Q1 crypto crash?
Early in 2020, reports of a new SARS-like disease from Wuhan, China began circulating the news. In a matter of months, this infectious disease spread throughout Asia. It didn’t take long for the virus to spread all over the globe. This urged the World Health Organization to declare their classification of the unprecedented COVID-19 as a pandemic on March 11, 2020.
As a result, governments all over the globe placed metropolitan cities, regions and entire countries under lockdown, halting all unessential movement to prevent transmission. Economic activities stopped and essential workforces were reduced to limited manpower. The lack of economic activity caused markets to fall. One of the affected markets is the crypto market.
Crypto in the time of coronavirus
The WHO declared COVID-19 a pandemic early on in March. This caused uncertainty in investors, knowing that it will greatly affect economic movement all over the world. Investors started selling their stocks including cryptocurrencies as a way to safeguard their investments. To protect their assets, investors liquidated their stocks in exchange for the global currency reserve, USD.
As a result, markets tanked and prices dropped. That’s why Bitcoin and other coins weren’t spared from the crash even though technically, crypto-assets do not fall under traditional markets. Because of crypto’s difference in comparison to traditional markets, some people were expecting the immediate rise of crypto assets as financial markets dropped. But as we saw, the crypto market joined others in the fall.
Marcus Swanepoel, co-founder and CEO of crypto exchange site Luno, believes that the crypto crash was mostly due to institutional traders and big-time investors dropping out of the game and selling the majority of their crypto assets. These are the same investors who have stocks placed in traditional markets. That’s why the crypto market initially followed the fall of the financial market. Grassroots-level adoption remains strong, and long-time “hodlers”—or those who hold on to their coins rather than sell—still hold on to their crypto assets.
Luno CEO says that now is the time for cryptocurrencies to shine, saying “the more dysfunctional the existing system becomes, the more there’s an opportunity to showcase to the world that there is a better way to do it”. After all, Bitcoin, the world’s first cryptocurrency, was born after the 2008 global economic crisis. It was created as an alternative to the dysfunctional financial system that failed to alleviate people from economic hardship.
Financial Wars Episode XI: Rise of Bitcoin
Soon after the crash in March, cryptocurrencies started appreciating once again, as seen in the tables above. After hitting a massive drop on March 17, the leading coins steadily grew, and now, Bitcoin’s price borders the $10,000 mark at $9,767. This could be because of the hype for Bitcoin’s halving event, but according to crypto market researcher Glassnode, there are more wallets with at least 1 BTC than before. More and more people are buying crypto even if they don’t use it for everyday needs.
In Malaysia alone, traffic in cryptocurrency exchange sites has been surging while the country is under extended lockdown. The Malaysian government has made the initiative of making regulatory policies to prevent malicious transactions in crypto exchanges. Their fully-approved crypto exchange site, Luno, reports that trading volumes on their site have increased up to 40% since the lockdown started. This goes to show that more and more Malaysians feel confident in placing their trust in alternative financial service such as digital assets.
This adaption contributes to the overall growth of cryptocurrencies all over the world. And with this pandemic causing not just problems in the medical field but also in the financial industry, people may come to realize that there are alternative ways to the current failing systems in place.
Global cryptocurrency adoption: Who is leading?
Developed countries such as the USA, South Korea and Japan are some of the leading countries when it comes to cryptocurrency adoption. They have contributed large efforts in the growth of cryptocurrency throughout the years. But one country that seeks to utilise the power of cryptocurrency in alleviating national economic crisis is Venezuela.
Due to poor governance, Venezuela’s hyperinflation rate has since hit 10 million per cent, making Venezuelan bolivar inefficient. As an attempt to solve the country’s financial problem, the government introduced their own cryptocurrency called Petro. But public acceptance remains low even after two years since President Maduro introduced it.
Even though Petro failed to win the confidence of Venezuelans and investors, other cryptocurrencies proved to be hugely popular. Just recently, it’s reported that over 20,000 local shops and enterprises will begin accepting crypto by June 1 as an effort to encourage crypto adoption even more.
Panama-based merchant-gateway company Cryptobuyer partnered with Mega Soft, a Venezuelan company that processes payments for local businesses. Together, they plan to use Mega Soft’s payment platform called “Merchant Server” in accepting dozens of cryptocurrencies such as Bitcoin, Ether, Dash, Litecoin, and Tether.
With 20,000 shops utilising this method of payment, nationwide adoption becomes possible and much easier.
Dash to the rescue: Cryptocurrency with biggest growth potential
One of the earlier coins to assist Venezuela in their crisis was Dash, which is digital cash that provides decentralised payment solutions. It partnered with different merchants so that payment using Dash can serve as an alternative. Aside from that, they also released Dash Text, a solution that allows people to send and receive cryptocurrency via text message. In a country where not everyone owns a smartphone where you can download apps, Dash Text makes paying with crypto more accessible. With all these ongoing projects, Dash is considered as the cryptocurrency with the biggest growth potential in the market.
In January, Dash Director of Media and PR Mark Mason tweeted that there had been a 562% increase in active Android devices using the Dash wallet app in the South American country from May to December 2019.
This proves that Venezuelans are accepting of the new financial systems, and with the new “Merchant Server” initiative, things might start turning for the better. Currently, 2,500 merchants in Venezuela accept payment in Dash. These vary from small coffee shops and supermarkets to huge international brands such as Burger King and Church’s Chicken.
The wide-scale adoption of Dash and the surge of business partnerships are most likely the reasons why the coin is one of the best performing crypto assets in the first quarter of 2020. In January alone, Dash outperformed Bitcoin by scoring triple-digit gains. Though it still suffered from the March crypto crash, Dash’s gross gains outweigh their 23% drop. This contributed to the overall cryptocurrency growth in the first quarter of the year.
Always growing, never stopping
There’s no better time to test an alternative system’s reliability than during a global crisis where traditional systems are failing. Even though the growth of the cryptocurrency market suffered drops in the first quarter of the year, the beginning of the second quarter already looks promising. With prices rising and trading volumes increasing, we just might be at the cusp of a bullish run. This might be the time that cryptocurrency showcases its reliability to the world.
Words by: Leann Padilla