The crypto market never stands still and is constantly evolving. But just like any other market, the innovations that arrive on the scene spawn trends that instantly either become sectors in their own right, or are adopted by the remaining players on the market to take advantage of the rising hype and capital flows that come along with it. Crypto trends are especially susceptible to such phenomena and the impact they have on the market.
The year 2021, with its wild dynamics of price rates and news flows, has already brought about a number of crypto trends that are definitely set to morph the landscape of the market for the near future, or until new crypto trends arise.
Decentralized Financial Services (DeFi projects)
DeFi took the market by storm in 2020, when the possibility of placing assets on non-custodial platforms for receiving passive income became a literal godsend for millions of online denizens around the world. With the pandemic hitting economies hard and jobs being cut in virtually every industry, the possibility of obtaining some manner of passive income on the crypto market through staking became a significant relief for those who had lost their jobs.
The given crypto trend is still evolving and is certain to continue attracting new users, as evidenced by its near $127 billion market capitalization, $15.7 billion daily trading volumes, and weekly inflows of around 200,000 new users. With such dynamics, and the emergence of new add-on services in the DeFi space, such as borrowing, lending, crypto banking and so on, the DeFi sector is well on its way to becoming the leading direction of digital asset application. Chances are quite high that DeFi may well be the crypto trend that will usher in the mass adoption of cryptocurrencies in their true form and use case scenarios.
Stablecoins As Useful Mediums
Stability is a luxury in the crypto and it has its place in an environment where traders primarily seek volatility. However, stablecoins are emerging in force as a powerful counterweight to volatile coins and a safe haven for those who are seeking a measure of stability and confidence in digital assets. Stablecoins provide their holders the ability to store value in digital currencies with the relative security of their tethers to real world assets, such as commodities like gold, or fiat, like the US Dollar.
The given crypto trend is being reinforced by the statistics, which are showing that stablecoins like Tether are growing in volume, as the latter has breached the $50 billion capitalization mark, nearly doubling from March values of $37 billion, and nearly tripling from its $17 billion market cap in January.
Governments around the world are eyeing the possibility of using digital assets as the market of cryptocurrencies swells and is beginning to present itself as a threat to the traditional financial infrastructure. The crypto trend of governments developing Central Bank Digital Currencies is not new, but it has been gaining unprecedented momentum in 2021, as several states have declared their intentions to either launch or start developing CBDCs.
Among the latest examples of countries preparing to issue their own digital assets is the Republic of Turkey with its crypto Lira that is being seen as a remedy for the country’s severely pandemic-weakened economy. The United Kingdom has already made an announcement that it is establishing a taskforce for researching the possibility of issuing a ‘Britcoin’ of its own. The Russian Federation is also in the queue with its crypto Ruble. The crypto trend of CBDCs is well-founded, considering the growing migration of citizens around the world from fiat to online payments and the decentralized environment of finance altogether.
Growth of NFTs in Gaming And Art Industries
The gaming industry is constantly on the lookout for innovation to keep gamers motivated, interested and engaged. The $64.5 billion gaming industry has recently received an important instrument for keeping monotony at bay. The advent of Non-Fungible Tokens with their qualities of uniqueness of the tethered assets and the guarantees of ownership has allowed games to introduce such assets into in-game mechanics and turn them from fully digital, virtual economies into new ecosystems intertwining with real finance.
NFTs have also stormed the art market as creators of all types have started monetizing on the given crypto trend, offering their works for millions of dollars at auctions. Collectors are also eager to solidify their rights to unique works of art through NFTs. The infamous Christie’s auction house is even launching its own NFT marketplace called TR Lab in light of the NFT market’s growth.
Institutions Investing in Bitcoin
Institutional investors are the key to both developing a market with their vast resources, and acting as proof of said market’s viability. The crypto trend of institutions investing in Bitcoin is more than just a trend, but a new reality that is injecting significant confidence in average market participants and acting as a signal for projects to keep developing.
Impact of 5G
The 5G network is developing rapidly, despite the growing movement of protestors in aluminum foil hats. The expansion of the system will allow mobile connectivity to make the transition to a new level of speed and throughput – one vital for the greater adoption of decentralized services, many of which are still lagging on 4G devices.
The crypto trend of mass Dapp usage is inextricably tied to the development of the 5G network, which is expected to become widespread in major crypto hubs like China and Russia by the end of 2023.
The crypto trends of 2021 are all related to the increasing penetration of digital currencies into everyday activities like gaming, financial operations, and interconnectivity between individuals – a key aspect of the decentralized economy based on peer-to-peer mechanisms. New trends in the industry are certain to emerge, but the current ones are enough to keep investors interested.