The most negative events of 2020 for the cryptocurrency market

The year 2020 has almost come to an end, which means it’s time to sum up its results for the cryptocurrency market. Over the past months, there have been many interesting events as well as bad days.

Today we’ll talk about the second: let’s analyze the most negative trends of the outgoing year, recall the major hacker attacks and pressure from government agencies or financial regulators.

According to a report by the analytical platform CipherTrace, as of November, the total loss from project hacks in the decentralized finance industry was more than $ 100 million. In addition, 45 percent of all hacker attacks in the first and second quarters of this year were related to DeFi.

DeFi and everything related to it

KingSwap platform spokesman Malcolm Tan summarized the situation in an interview with Cointelegraph reporters. Here is his line in which he shares his analysis of the situation.

The DeFi niche can shake up the financial industry with digital technology, but progress is thwarted by scammers who thwart faith in the community. Until these issues are addressed and DeFi investors and supporters can no longer invest their assets in DeFi more securely and reliably, this nascent industry will not grow significantly.

In addition, hundreds of fly-by-night projects emerging on the world’s most popular decentralized exchange, Uniswap, have become synonymous with fraud in the DeFi world. Their goal is to collect as much ETH as possible from traders hungry for quick profits and disappear forever. By the way, they even have their own meme name – «apes» or «monkeys» who mindlessly invest in everything that is somehow connected with decentralized finance.

Regulators step on your heels

In the European Union, stringent anti-money laundering standards have led some exchanges to leave the region due to the growing cost of complying with these laws. In addition, the outgoing year was marked by a serious attitude of US government organizations to launch a full-scale war against anonymous cryptocurrencies.

And for another altcoin – XRP from Ripple – 2020 ends in a very negative way. The coin was de facto declared a security by the financial regulator SEC, which led to a sharp drop in its price and delisting from some exchanges.

In addition to direct pressure on crypto, states may very soon begin to «compete» with it thanks to virtual assets issued by central banks (CBDC). So far, only China has succeeded in this field, but other countries in 2020 have begun to actively participate in the race.

Slow cryptocurrency exchanges

In July, representatives of the Veriphi analyst team published a report in which they discussed the topic of the unhurried implementation of the Segregated Witness (SegWit) update by cryptocurrency exchanges, which allows more transactions to be intervened in the cryptocurrency block. According to experts, the slow implementation of the update cost traders the equivalent of more than $ 500 million in additional commissions that could not have been paid.

In addition, some exchanges are pulling with support for the Liquid sidechain and the Lightning Network.

For example, Coinbase made changes to its transactions in March, and Binance implemented support for Bech32 addresses just a few days ago. Prior to that, in December, Kraken representatives announced their desire to support Lightning technology in 2021.

In this regard, analysts argue that it is much more profitable for cryptocurrency exchanges to add support for new altcoins than to spend resources on Bitcoin updates. This way they make more money, so the scheme sounds logical enough.

In general, 2020 was very rich in positive and negative events. Unfortunately, in the emerging cryptocurrency market, the latter will always happen. It remains only to wish that in the coming year there will be much less of them. We believe that given the current fluctuations in coin rates and their active hops, the scenario for 2021 for the cryptocurrency niche really seems positive. Therefore, investors have to wait for the next run of the market and not be disappointed in some coins before this event.

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