Cryptocurrency Trends to watch in the next year
The world of cryptocurrency has been on the roller coaster road in the last decade, and prices fluctuated wildly based on market emotions and technological advances. As we enter a New Year, experts will predict significant trends that will create the future of this space. In this article, we will look more closely at the most exciting cryptocurrencies that need to be monitored in the coming year.
1. Increased acceptance of institutional investors
As institutional investors such as cover funds and pension funds become more convenient with cryptocurrencies and their investment portfolio is moving towards digital assets. This increased acceptance is expected to increase the demand for cryptocurrencies, leading to higher prices and increased market capitalization.
Deloitte reports that the total value of the cryptocurrency owned by institutional investors reached $ 143 billion in 2020, compared to $ 20 billion in 2017. As more and more institutional investors enter the space, the stakes are increasing and increasing with them. Liquidity and market activity.
2. Increasing adoption in mainstream businesses
Cryptocurrencies are no longer just for fans; Mainstream businesses begin to accept them as a way to increase efficiency and reduce costs. Companies such as Microsoft, IBM and Amazon have already incorporated cryptocurrencies into their payment system or are used as an alternative to traditional currencies.
The increasing acceptance of cryptocurrencies among mainstream businesses leads to a significant increase in adoption rates, which facilitates individuals to participate in space. As more and more companies are following the example, we can expect consumers to expect increased interest in this type of transactions.
3. For decentralized financing (defi) Increased emphasis on **
Decentralized financing (Defi) is a rapidly growing segment in the cryptocurrencies market. Defi platforms allow users to rent cryptocurrencies and borrow cryptocurrencies, reducing transaction fees and increasing liquidity.
Chainalysis reports that Defi transactions increased by 400% in the fourth quarter of 2020, as opposed to the same period last year. This growth is expected to continue in the New Year and the Defi platforms will start and existing ones will expand its offerings.
4. Switch to central bank to digital currencies (CBDC)
The central bank’s digital currencies (CBDC -K) are attracted because governments from all over the world begin to discover their potential benefits. CBDCs can revolutionize the way in which the currency thinks, providing a digital alternative to traditional Fiat currencies and potentially reducing transaction costs.
The European Central Bank has already launched its own CBDC, E-CUR/EN, which is currently in beta testing. Similar projects are underway in other countries, such as Japan, China and South Korea, making it clear that CBDCs are becoming an increasingly popular solution for governments to reduce their dependence on traditional currencies.
5. Increased regulation
Because cryptocurrencies are accepted more mainstream, regulators from all over the world are beginning to notice. Governments break into unregulated stock exchanges and institutional investors are demanding stricter rules.
The United States Commodity Futures Committee (CFTC) has issued a statement to the increased transparency of cryptocurrency transactions, while the European Union’s securities market is launched a new decree aimed at protecting investors in cryptocurrencies.
6. Increased emphasis on safety
Cyber security threats in cryptocurrency space are increasingly standing out, while hackers are targeting stock exchanges, wallets and individual users.