As the cryptocurrency world continues to grow at an exponential rate, it is crucial to keep up. With the total market capitalization of cryptocurrency exceeding a trillion dollars, it makes sense to cash in on it. There are more than 100 million crypto users across the globe. If you are wondering what gives a cryptocurrency value? You need to know that the value of cryptocurrency depends on its demand and number of users. To help you make the most of 2021, you have to consider the following cryptocurrency trends.
- Institutional Adoption
One of the most important cryptocurrency trends that you cannot overlook in 2021 is the institutional adoption of the crypto ecosystem. Large corporations and financial institutions had viewed the cryptocurrency ecosystem with a great deal of scepticism. However, things have completely changed this year as many financial institutions are investing in establishing a cryptocurrency ecosystem. Large scale funds are finally being used in this area.
- DeFi (Decentralized Finance)
The advent of DeFi has revolutionized the entire financial sector. More and more people are interested in decentralized finance than ever before. It uses the power of blockchain to ensure that smart contracts are leveraged to avoid the dependence on financial intermediaries. From the creation of derivatives to traditional lending, DeFi transactions are bringing about great change. Besides, the growth of DeFi is only the beginning. Yield farming is also gaining traction. It is similar to digital banking. Users simply need to deposit their crypto assets to receive an interest on those assets.
- NFTs (Non-Fungible Tokens) Tokenize Everything
Another interesting cryptocurrency trend in 2021 is the development of NFTs. The tokens represent digital claims on assets or something unique. NFTs only became popular this year and will only continue to grow. On the other hand, fungible tokens do not always represent a claim on an asset. NFTs are backed by a claim on video game add-ons, collectibles, digital artwork, or even domain names. They are normally created on the ETH blockchain.
- Increased Regulations
The crypto market will only experience an increase in regulations in 2021. The 2017 ICO craze led to an increase in government scrutiny. In fact, legal questions revolving around cryptocurrency have only continued to grow among regulators. Therefore, anyone interested in the industry would need to read the latest news and learn more about the regulations in place.
- Expansion of Decentralized Applications Market
Finally, there would also be an expansion in the market for decentralized applications. These software applications run on peer-to-peer networks. The truth is that the market for decentralized applications is huge. With transaction volume increasing every year and the fact that the apps run on the blockchain, there is tremendous potential.
Conclusion
Once you have gone over this post, you will know everything there is to know about cryptocurrency trends in 2021. It is important that you read up on the news and try your best to take advantage of the opportunities presented.