Cryptocurrency Outdoes Gold, Emerges as the Best Performing Asset in 2020 This Year

Ritika Sharma
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.
  • Economic Times revealed that cryptocurrencies have outperformed gold this year
  • Bloomberg Galaxy Crypto Index has appreciated by more than 65% in 2020
  • Strategist at Bloomberg International, Mike McGlone has said that global drive in DeFi adoption has facilitated the growth of Ethereum

The debate between gold and cryptocurrencies being the superior investment has prevailed for over a decade now. We have seen gold proponent Peter Schiff abominate the blockchain technology and cryptocurrencies. For him the predominant investment has always been Gold. On the other hand major crypto personalities like the Winklevoss twins on several instances have elaborated how cryptocurrencies outshine traditional investments. Moreover, the much talked Decentralised Finance or DeFi protocols have given an entirely new meaning to the world of cryptocurrency. And it is safe to say that in particular DeFi protocols have propelled the adoption of cryptos and helped the sector reach new heights. 

Total Collateral Locked Under DeFi Protocols Crosses $9 Billion

A recent report by the Economic Times revealed that cryptocurrencies have outperformed gold this year. The total value locked under the DeFi protocols now amounts to an enormous $9 billion. At the start of the year the DeFi collateral was only $700 million. The Bloomberg Galaxy Crypto Index has appreciated by more than 65% in 2020 and has outshined gold’s jump by 20% this year. As per the report the Ethereum was one of the main reasons why cryptocurrencies have been titled the best performing asset this year. Ethereum is responsible for more than one third of the entire crypto ecosystem. 

Ethereum has Played a Major Role in the DeFi Craze

Strategist at Bloomberg International, Mike McGlone has said that global drive in DeFi adoption has facilitated the growth of Ethereum as it continues to maintain its leadership status. Ethereum is the primary platform for the growth of DeFi applications. A huge number of DApps rely on the Ethereum platform for operating. On the other hand, Bitcoin’s recent rally for the last two months has proved as to why the cryptocurrency is considered the biggest store of value. As the economic stability of nations continue to cripple, cryptocurrencies are providing major investors to protect their funds from inflation. 

Overall Cryptocurrency Growth is Positive

However, some critics are still not convinced that cryptocurrencies are the future of investments. This is because they are generally associated with heavy price swings and volatility, which is sometimes risky. In addition, they claim that the decentralised finance sector is not as decentralised as it claims to be. But the overall cryptocurrency usage as well as adoption seems to be in a good place as crypto derivatives expand.

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