Top 10 cryptocurrencies for 2020
The year 2019 can be summed up in two distinct phases for the digital asset market: a half year of strong growth, followed by a no less sharp decline. Nothing unusual for this ecosystem. Nevertheless, prices remain at higher levels than at the beginning of the year. For Bitcoin, which is the primary asset, we are nevertheless seeing 100% growth over the year, which preserves its status as the most attractive asset in all types of markets.
For the year 2020, the Bitcoin community is looking forward to the “halving”, the key date foreseen by the protocol to tighten its monetary issuance rules.
Ethereum continues its rapid development and foresees the release of its first phase of “ETH2”, an updated version of its protocol allowing to introduce a dose of proof of stake and a method to generate passive income by securing the protocol for ether owners.
Relatively young protocols such as Tezos or Cosmos are gaining traction while decentralized Ethereum-based applications such as Aave, Kleros or Livepeer are banking on this new year to grow and gain critical mass.
Finally, 2020 will also be the return of decentralized Organizations with initiatives such as Stake Capital or DAO ventures which propose new investment and income redistribution vectors.
Cryptocurrencies that can’t be ignored
“Digital gold” has proven over the years its ability to stand over the time and its status as an investment value. In 2020, halving will cut money creation in half, from 12.5 to 6.25 BTC every ten minutes. Halvings take place approximately every four years, and the previous halvings in 2012 and 2016 resulted in a sharp increase in asset value, mechanically caused by reduced supply in the market. The community seems to be betting that history will repeat itself, but no one knows when this potential movement will occur.
For the first time, Bitcoin’s money supply inflation will fall below the symbolic 2% per year. The “reserve of absolute value” model of the Bitcoin asset that worked in its first 11 years of existence will continue to be tested. Bitcoin therefore remains an asset that should be present in significant quantities in any portfolio of digital assets.
You can buy and sell Bitcoin online right now with Coinhouse.
Ethereum had an eventful year 2019, with a few technical update hiccups and some interesting innovations. The year 2019 saw the emergence of Decentralised Finance (DeFi), almost all of whose projects are based on Ethereum technology.
Numerous financial services offering the borrowing or making available of digital assets such as Compound.Finance or MakerDAO have contributed to the health of the DeFi ecosystem, which now represents $650M and shows constant double-digit growth.
The community is eagerly awaiting the ETH2 upgrades that will ultimately ensure that the network has the capabilities to become the blockbuster of tomorrow’s innovative financial products.
Despite a current price that is currently at half mast compared to Bitcoin, Ethereum is today an essential asset to include in a basket of cryptocurrencies due to the cross-fertilisation of its ecosystem.
You can buy and sell Ethereum online right now with Coinhouse.
Cryptocurrencies to be seriously considered
Tezos, a project carried in part by French teams, is beginning to emerge as an important player in the crypto ecosystem. This project highlights the rigour and security of its programming mode as well as a method of improving the protocol coded within it. It is thus the XTZ owners who decide on the improvements to be made to the protocol.
The security of the protocol is ensured by a Proof-of-Stake system that allows XTZ investors to capture the monetary creation in just a few clicks. Coinhouse allows you to participate in this system and earn an annual return of around 6 to 7% on your XTZs.
The XTZ asset has performed remarkably well in 2019. The days when it was decreasing can be counted on the fingers of one hand. The platform attracts players wishing to develop the infrastructure around fundraising and the distribution of financial securities (STOs).
However, Tezos is an Ethereum competitor, an asset that already benefits from a significant network effect and will be difficult to dethrone. This project seems to be taking off in a sustainable way and can be envisaged in a cryptocurrency portfolio.
MakerDAO [MKR, DAI]
Built on the Ethereum network, MakerDAO is the leader in decentralized stablecoins management systems. Via a decentralized credit system that issues the DAI token, whose value is backed by the dollar, the holders of the MKR token receive a remuneration on the interest of the credits.
DAI is celebrating its two years of existence and has always fulfilled its objective of stability even in the most volatile periods of the market. This stablecoin is gradually establishing itself as the primary currency of the Ethereum ecosystem and is now integrated into the majority of the network’s decentralized applications.
The year 2020 will be the year of creation of new digital assets for the MakerDAO protocol, more assets in collateralisation, new variants of the DAI representing other fiduciary currencies including the much awaited DAI-EUR, and even traditional financial assets. The MKR protocol currently represents $320M in escrow assets. It remains a value to be seriously considered in the constitution of a portfolio of cryptography.
Cosmos presents itself as “the internet of blockchains”. The project aims, among other things, to solve a frequent problem in the universe of digital assets, namely the difficulty of simply and securely exchanging tokens of different blockchains. We are therefore talking about a network of blockchains. In Cosmos, the different blockchains are called “zones”.
The interoperability of blockchains is one of the important topics in the crypto sphere. The possibility to act as an extension of existing blockchain networks is an essential feature. However, Cosmos is a young project and still at a very experimental stage. From a technical point of view, Cosmos is a very ambitious and complex project. If it succeeds, it is likely that the asset will increase in value comfortably.
Cryptocurrencies to be examined closely
Polkadot, like Cosmos, seeks to address the well-known problems of scalability and interoperability. The project presents itself as a complementary and non-competitive technology to networks such as Bitcoin or Ethereum. Polkadot seeks to implement an Internet where independent blockchains can exchange information and transactions via the “relay chain” with principles of scalability, governance and interoperability.
What makes up the network can be private, consortium or public. Polkadot uses a Proof-of-Stake implementation to provide an economic incentive to secure the system. Attention, the DOT token is not yet available on the market. Only representations of the asset are available in the form of promises of future tokens in some market places. As long as the asset is not listed, it is difficult to project the future valuation of the asset.
Synthetix Exchange [SNX]
Synthetix and its SNX asset divides the community between unconditional fans and calls for caution. If MakerDAO can be defined as a cautious protocol emphasizing safety before growth, Synthetix is its perfect opposite. Synthetix offers digital asset generation backed by its native SNX asset. In theory, it is possible to create any synthetic asset: dollar, euro, gold, Bitcoin, or Tesla stock. All that is required is the existence of an oracle giving the price of the asset in question on its native market.
Synthetix will therefore need to ensure that its oracle system is resilient to any attack. Synthetix does not use MakerDAO’s prudent liquidation mechanisms, and multiplies the distribution of rewards for asset creation by redistributing the profits of its market platform and generating SNX tokens allocated to the system’s participants.
These risky operating mechanisms are mitigated by the fact that 750% collateralisation is required to generate synthetic tokens. The formula worked in 2019, as the platform moved from a confidential profile to a protocol representing $169M in escrow assets, and is one of the best performing in the industry with 3400% gains.
If this asset appears risky to us, an investor willing to take risks may consider closely monitoring this project and possibly integrating an homeopathic dose of this value into his portfolio.
Cryptocurrencies with strong potential in 2020
ETHLend has raised $18M through an ICO in 2017 to create a decentralized peer-to-peer lending system. Although it was a great success, the project lacked traction as it came to market too early. Following the emergence of DEFI in 2018 and its success in 2019, the Ethlend team is now working on a decentralised finance service bringing new functionalities into the ecosystem such as stable rate loans or loans designed for traders.
A large part of the revenue from this protocol will be redistributed to LEND token holders. These developments seem to be gaining market acceptance and the LEND asset doubled its value in the last quarter of 2019 on the eve of the deployment of this new platform.
An asset with an attractive risk/return ratio to keep on the radar of investors open to new opportunities.
Kleros is an innovative project, a decentralized arbitration tribunal whose token PNK allows its bearers to become “jurors” in disputes and to collect the fees paid by the disputing parties. The project continued to develop in 2019 resolving more than 140 disputes for a cumulative amount of almost half a million USD.
For the year 2020, it is banking on new integrations in applications. Freelancing platforms, social media for content moderation, the Kleros cooperative is multiplying the initiatives that should come to fruition in the coming year.
The project managers are preparing to raise a second round of funds on January 11th after having fulfilled their commitments for the years 2018 and 2019. Currently modestly valued at $1.6M, the project seems to us a candidate for potentially interesting performances in 2020. It remains an asset to be monitored and eventually integrated into a portfolio to increase its risk/return.
Stake Capital DAO [SCT]
Stake Capital is one of the major players in the staking market. The company offers to leverage investors’ assets on most of the protocols currently available.
In 2020, it will launch a DAO (Decentralized Autonomous Organization) that will collect all the revenues received by Stake Capital and redistribute them in the form of SCT tokens that can be used to collect additional revenue and have an impact on the governance of the project.
Investors wishing to gain exposure to the staking market, but not necessarily focusing on a particular asset, will be able to invest through the SCT token in a basket of staking revenues.
They will also be able to obtain a derivative of their assets held in escrow that they can use for their investments. We believe that this project has interesting potential, especially with the growing emergence of protocols incorporating a form of staking such as Ethereum, Tezos, Livepeer or Cosmos. As this asset is still at the project stage, it is not yet possible to acquire it, but it is a project to be followed.
You will have thus understood it, investing in cryptomoney without doing research beforehand is not recommended. You have to be able to evaluate and understand what you are buying. This is an exciting process in a dynamic and innovative cryptoeconomy environment, but it takes a lot of time.
Coinhouse facilitates your entry into the buying and selling of crypto-currencies with a crypto-currency consulting offer. If you are in Paris, find us in our Parisian store at 4 bis rue Saint-Sauveur, open from 12 noon to 7pm on weekdays.
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