2020 was an unforgettable year for the world. The COVID-19 pandemic emerged early in the year and rapidly spread globally, prompting widespread lockdowns and economic shutdowns. This led to disruptions in global supply chains and significant impacts on traditional capital markets.
Amid the challenges, Bitcoin, created by Satoshi Nakamoto over a decade ago, offered a glimpse of hope and a new paradigm. For those who embraced it, Bitcoin provided substantial returns in a year when many traditional markets struggled.
This article reviews the performance of the cryptocurrency market in 2020. Please note that all data is as of December 21, 2020.
Top 10 Cryptocurrencies by Market Cap
Bitcoin (BTC)
As the largest cryptocurrency by market capitalization, Bitcoin surged over 220% in 2020. It started the year around $7,000 and, after several months of consolidation, firmly surpassed $10,000 by late July. In the latter half of the year, Bitcoin gained momentum, breaking through $20,000 to set a new all-time high and approaching $25,000 by year-end.
In early February, Bitcoin reclaimed the $10,000 level. However, by March, as the pandemic worsened, it experienced a sharp decline alongside traditional markets like oil and stocks. On March 12–13, Bitcoin’s price plummeted, breaking below $7,000, $6,000, and even $5,000, shaking market confidence and raising doubts about its status as a "safe-haven asset."
Following the crash, Bitcoin gradually recovered as central banks implemented宽松 monetary policies and optimism around the halving event grew. On May 8, it surpassed $10,000 again, but two days later, it dropped sharply to around $8,200.
The third Bitcoin halving occurred on May 12, reducing the block reward from 12.5 BTC to 6.25 BTC. Contrary to expectations of a immediate surge, Bitcoin’s price remained subdued for about a month, struggling to break $10,000.
By July 26, Bitcoin briefly exceeded $10,000, and on August 11, MicroStrategy announced it had purchased 21,454 BTC for $250 million, adopting Bitcoin as its primary treasury reserve asset. This helped Bitcoin stabilize above $10,000.
In Q4, Bitcoin delivered impressive gains. PayPal announced crypto trading services on October 21. By November 4, Bitcoin broke $14,000, reaching a high not seen since January 2018. It continued to rally, surpassing $16,000 and $17,000 in mid-November.
Institutional adoption and a weakening U.S. dollar fueled further gains. On November 24, Bitcoin broke $19,000 for the first time since 2017. On December 16, it surged past $20,000, setting new records and trading above $24,000 by year-end.
2020 was a fruitful year for Bitcoin investors. With growing interest from Wall Street and traditional financial institutions, Bitcoin’s influence on decentralized, borderless payments is set to expand.
Ethereum (ETH)
Ethereum, the second-largest cryptocurrency, gained nearly 400% in 2020, outperforming Bitcoin. At the time of writing, ETH was trading around $650, still below its 2018 all-time high of $1,500.
Driven by the surge in decentralized finance (DeFi) and yield farming, Ethereum gained momentum in late July. On July 26, it broke $300 after seven consecutive days of gains. Less than a month later, it surpassed $400 and even approached $500, reaching a multi-year high. After a two-month consolidation between $350 and $400, Ethereum resumed its upward trend.
On November 5, the Ethereum 2.0 development team announced that Phase 0 would launch on December 1, marking a critical upgrade. This news boosted market confidence, and ETH broke $400 again.
By November 20, the Ethereum 2.0 deposit contract had reached 22.89% of its required threshold. The Grayscale Ethereum Trust became the first publicly quoted ETH investment product in the U.S., paving the way for institutional and retail investment. Ethereum’s price rallied to $500, a key resistance level, and reached a two-and-a-half-year high. Four days later, as the deposit contract neared 80% completion, ETH broke $600.
In early December, ETH consolidated between $550 and $600. On December 16, as Bitcoin set new records, Ethereum surged above $600.
Bitcoin and Ethereum, the two largest cryptocurrencies, showed similar price trends in 2020. Bitcoin remains stable and mature, while Ethereum boasts a robust ecosystem. Both are poised for broader adoption.
Ripple (XRP)
XRP, the third-largest cryptocurrency by market cap, gained over 190% in 2020. For most of the year, it traded around $0.30, with lower activity compared to other cryptocurrencies. However, on November 21, XRP surged 40% in a single day, reaching a yearly high of $0.66 on November 24.
This rally was partly attributed to the Spark token airdrop by Flare Network, where XRP holders could claim Spark tokens at a 1:1 ratio. However, after the airdrop, XRP’s price declined steadily in early December.
In late December, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, alleging that XRP was an unregistered security. The news caused XRP’s price to drop over 15.9% in 24 hours, trading around $0.41.
Market experts warned that if the SEC prevails, XRP could face delistings from exchanges, reduced liquidity, and further price declines.
Tether (USDT)
USDT, launched in 2015, is a stablecoin pegged to the U.S. dollar. It is the largest stablecoin by market cap and trading volume. Its market cap exceeded $20 billion in 2020, up from $4.2 billion at the start of the year.
Initially launched on Bitcoin’s Omni protocol, USDT is now available on multiple blockchains, including Ethereum, EOS, TRON, and others. Despite concerns about transparency, USDT remains the dominant stablecoin, driven by strong demand in emerging and derivatives markets.
Litecoin (LTC)
Litecoin traded around $117 in late 2020, with a yearly gain of about 178%. Its all-time high of $373.02 was set in December 2017.
LTC’s market cap of nearly $7.6 billion surpassed both Bitcoin Cash (BCH) and Chainlink (LINK), ranking fifth.
Created by Charlie Lee in 2011, Litecoin shares many attributes with Bitcoin but offers faster transactions. Often referred to as "digital silver" to Bitcoin’s "gold," Litecoin had its first halving in 2019, reducing block rewards from 25 LTC to 12.5 LTC.
Litecoin’s late-year rally was fueled by Grayscale’s large-scale purchases and support from PayPal, making it more accessible to retail investors.
Bitcoin Cash (BCH)
BCH gained about 61.86% in 2020, trading around $340 with a market cap of approximately $6.4 billion. Its all-time high of $4,358.92 was reached in December 2017.
BCH was created in August 2017 via a hard fork from Bitcoin, driven by debates over scalability. It undergoes semi-annual hard forks, though the 2020 fork had minimal impact on its price. Year-end gains were largely driven by overall market trends.
Chainlink (LINK)
LINK entered the top 10 cryptocurrencies by market cap in 2020, with a yearly gain of nearly 600% and a market cap of about $5.2 billion.
Chainlink is a decentralized oracle network that provides real-world data to smart contracts on platforms like Ethereum. It conducted an ICO in 2017, raising $32 million, and launched its mainnet in June 2019.
LINK’s surge was closely tied to the DeFi boom, as oracles are essential for fetching data like prices and interest rates. After peaking at $18.6 in August, LINK consolidated between $10 and $12, trading around $13 by year-end.
Cardano (ADA)
ADA gained nearly 385% in 2020, with a market cap exceeding $5.1 billion.
Cardano is a proof-of-stake blockchain platform designed for smart contracts and dApps. ADA is its native token, with a maximum supply of 45 billion.
Key developments in 2020, including the Shelley upgrade and the announcement of Goguen, drove ADA’s price higher. By December 21, ADA was trading around $0.16.
Binance Coin (BNB)
BNB, the native token of Binance exchange, gained about 157% in 2020, with a market cap of approximately $5.1 billion.
BNB’s rally was fueled by the launch of Binance Smart Chain, Binance Pool, and various DeFi projects. Trading at $35.35, it neared its 2019 all-time high of $39.45.
Polkadot (DOT)
Polkadot (DOT) gained about 45% in 2020, with a market cap of around $4.7 billion.
Polkadot is a blockchain platform that enables interoperability between different chains via parachains. It reached an all-time high of $6.86 on September 1 but later corrected to around $4. News of upcoming parachain auctions in November helped DOT rebound to $5.
Among the top 50 cryptocurrencies, 14 outperformed Bitcoin, including two DeFi tokens: YFI and SNX. YFI led with a staggering 1,624% gain.
Other top performers included KSM, CEL, THETA, ZIL, XEM, WAVES, LINK, OMG, ETH, ADA, XLM, and XMR.
DeFi Tokens That Outperformed Bitcoin
Yearn.finance (YFI): 1,668.62%
YFI is the governance token for yearn.finance, a DeFi yield aggregator. It allows users to optimize yields across various DeFi protocols. YFI gained fame in 2020, surpassing Bitcoin’s price shortly after launch and reaching over $43,000. Its founder, Andre Cronje, issued 30,000 YFI tokens to decentralize control.
Synthetix (SNX): 527.00%
SNX is the native token of Synthetix Network, a platform for synthetic assets. Users can mint synths by collateralizing SNX, enabling exposure to assets like fiat currencies, commodities, and cryptocurrencies without owning them.
Other Top Performers
Kusama (KSM): 4,339.44%
Kusama is an experimental blockchain platform built with Substrate, serving as a testing ground for projects before they deploy on Polkadot.
Celsius (CEL): 1,896.03%
CEL is the token for Celsius Network, a decentralized lending platform that allows users to earn interest on crypto and borrow without fees.
Theta (THETA): 953.73%
Theta is a decentralized video delivery network that rewards users for sharing bandwidth and resources. It aims to disrupt traditional streaming platforms.
Zilliqa (ZIL): 950.24%
ZIL is the native token of Zilliqa, a high-throughput blockchain that uses sharding to scale. It supports smart contracts and dApps.
NEM (XEM): 800.64%
XEM is the token for NEM, a blockchain platform designed for enterprises. It offers APIs for easy integration and is known as the "smart asset blockchain."
Waves (WAVES): 615.89%
Waves is a blockchain platform for tokenization and trading. Users can create custom tokens and trade them on the Waves exchange.
OMG Network (OMG): 412.28%
OMG is the token for OMG Network, a Layer-2 scaling solution for Ethereum. It aims to improve financial inclusivity and interoperability.
Stellar (XLM): 284.34%
XLM is the native token of Stellar, a blockchain for cross-border payments. It acts as a bridge currency and prevents spam transactions.
Monero (XMR): 224.79%
XMR is a privacy-focused cryptocurrency that uses ring signatures and stealth addresses to obscure transaction details.
Frequently Asked Questions
What drove cryptocurrency gains in 2020?
The COVID-19 pandemic and subsequent economic policies played a significant role. Loose monetary policies increased interest in alternative assets like Bitcoin. Additionally, the rise of DeFi and institutional adoption fueled growth for many cryptocurrencies.
Which cryptocurrencies outperformed Bitcoin?
Fourteen cryptocurrencies in the top 50 outperformed Bitcoin, including Ethereum, Chainlink, and Cardano. DeFi tokens like YFI and SNX also saw substantial gains.
Why did XRP’s price drop in December?
XRP’s price declined after the U.S. SEC filed a lawsuit against Ripple, alleging that XRP was an unregistered security. This raised concerns about its future availability on exchanges.
What is the outlook for cryptocurrencies in 2021?
While past performance doesn’t guarantee future results, the trend toward institutional adoption and DeFi innovation is likely to continue. However, regulatory developments will be crucial. 👉 Explore more strategies for cryptocurrency investing
How does Ethereum 2.0 affect its price?
Ethereum 2.0 aims to improve scalability and security through proof-of-stake. This upgrade is expected to enhance Ethereum’s utility, potentially positively impacting its price.
Are stablecoins like USDT safe?
Stablecoins like USDT are generally considered low-risk due to their peg to fiat currencies. However, transparency and regulatory compliance vary, so research is advised.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and exercise caution when trading cryptocurrencies.