There is no doubt that 2020 proved to be a remarkable year for cryptocurrency because the global COVID-19 pandemic accelerated its growth and digital transformation. It is also a fact that 2021 continues to witness some major achievements and breakthroughs, as there are numerous cryptocurrency trends that appear to be shaping the future of finance. We have already crossed the halfway mark in 2021, but new developments continue to happen in the crypto world with each passing day. In the second half of 2021, greater crypto adoption is expected and there will be a number of crypto trends that will rule the space.
Every crypto trader and enthusiast needs to know about the existing and upcoming cryptocurrency trends in order to make smart trading and investment decisions. Here are some of the top ones:
One of the biggest trends in the world of cryptocurrency this year is none other than Decentralized Finance and these DeFi projects are expected to continue to have a major presence. They have already built a strong foundation and experts believe that they will turn out to be key in the accelerated adoption of tokenization of digital assets, or their digital storage. In addition, DeFi is also expected to boom due to the growth of Ethereum.
Growth of Stablecoins
There was a 500% increase in the volume of stablecoins that were circulating in the market in 2020. In 2021, dollar-pegged stablecoins are expected to see high growth, with Tether and USDC leading the market. Stablecoins have become trending crypto coins because the advantages they offer have managed to draw in more investors. These allow crypto traders and investors to protect themselves from the volatility of the crypto market.
Implementation of Tax Regulations
As the cryptocurrency bubble continues to grow and the increase in adoption of these digital currencies in different countries around the world will result in the implementation of tax regulations. Crypto taxation remains ambiguous for now, but it is expected that standard crypto regulations may be introduced that will have an impact on all crypto transactions and activities.
Central Bank Digital Currencies (CBDCs)
According to experts, with the introduction of regulations in this space, central banks are also expected to be part of the crypto market through the launch of Central Bank Digital Currencies (CBDCs). This can end up becoming the future of finance and payments. China has already created its own digital currency i.e. the digital yuan and a number of other countries around the world, including the UK, USA, and Europe are also working on creating tokenized money.
NFTs (Non-Fungible Tokens)
Digital assets that represent products in the digital and real-world are known as NFTs. They are very useful for people who are interested in trading items because this helps them in avoiding the complicated onboarding process of a centralized platform for this purpose. NFTs are already quite common in the gaming and art industry and the adoption of NFTs is expected to increase in the latter half of 2021.
Crypto Going Public
It is possible that cryptocurrencies experiencing growth may test the waters for their IPOs. As a matter of fact, there is a possibility that even crypto exchanges may go public because they are also growing in popularity. This could result in making cryptocurrency a very well-established market, with the scope being defined by major players.
The interest of Millennials in Crypto
Other than crypto traders and investors, even millennials have also taken an interest in the crypto space. If this interest continues to grow, then more educational material about cryptocurrencies will be made available for helping millennials also making their jump into the cryptocurrency market. The crypto market trends will be used by millennials for making strategic investments.
5G Will go Mainstream
The use of 5G will become excessive when it comes to crypto mining and this is expected to have repercussions in the market. It will also have an impact on DeFi operations and 5G will also be used for introducing new services in the crypto market. Traders will no longer have to deal with network issues when they are buying and selling digital currencies and it will be easier for them to take advantage of even the smallest price movements. This is because 5G will be able to offer high-speed connectivity, which will eliminate the need of having servers located close to crypto exchanges.
Keeping up with these trends is essential for every crypto trader because they will be able to plan their strategies accordingly.