The crypto markets are always a place for innovation. While Bitcoin mining might not be an option for everyone, it seems like there are many crypto trends opportunities in the market for investors and cryptocurrency users of all types.
One thing that makes these markets so interesting is the pace of change. There is always news and seemingly minor trends can swing the markets quickly. For those investing in crypto markets, keeping an eye on these trends is important.
If you are interested in what might be on the horizon, the following are a few crypto trends to keep an eye on.
A Boom in DeFi
Decentralized Finance (DeFi) has the potential to solve all sorts of problems. Beyond the realm of cryptocurrency, it can empower people and businesses with the ability to make a range of financial transactions and agreements without the need for traditional middlemen. At the time of writing, there is close to $50 billion locked in DeFi contracts. As new applications emerge, we should expect to see this market grow.
A surge in stablecoins
Stablecoins have an appeal to those who are averse to the volatility seen in the markets for many cryptocurrencies. Being backed by the value of something like a fiat currency or other assets, stablecoins can offer the ease of transaction of a crypto coin with values that are a little more predictable. Presently, some of the most popular stablecoins in the market include Tether, True USD, USD Coin, Binance Coin, Paxos Standard, etc. Investors should expect to see more stablecoins coming on the market in the coming years.
PayPal’s move into crypto
As one of the world’s largest payment processors, PayPal has the power to influence markets. With their move into crypto, PayPal users in the US can now buy, sell, hold and pay with a select variety of crypto coins. Being such a common service, this is sure to expose more people to the idea of using and investing in cryptocurrency. If all goes well with the early stages, PayPal may even consider working with an expanded range of coins and offering the service in more countries.
A big year for regulation
The cryptocurrency hype has been building for years now. With more people using and trading crypto coins, governments are taking more of an interest in crypto. As one example, the US Treasury is asking for more authority to collect information on trades. The IRS is also asking for more funding to enforce taxes on crypto transactions. This might be worrisome for some crypto enthusiasts, but heightened regulation could also help to build confidence in the markets.
NFTs going mainstream
Non-fungible tokens were a niche product for years. After a big 2020, that trend is starting to change. With some NFTs selling for millions of dollars, it is becoming a market that is hard to ignore and some even call the NFT bubble. Beyond the unique art selling on the NFT market, we should expect to see some of the world’s largest corporations dipping their toes in the NFT market.
The digital Yuan
China has been experimenting with its digital Yuan for some time now, and it is already available in parts of the country. The idea is to provide many of the features that attract people to cryptocurrency in a digital currency that is backed by a central bank. If China is successful in this endeavor, we should expect more central banks from around the world to start developing their own digital currencies. In the long run, this could be a trend that puts pressure on crypto markets.
Tough times for Ripple
As one of the top ten coins by market cap, Ripple is a major player in crypto. With that said, it is in the middle of a rough year. The SEC filed an action against Ripple at the end of 2020. This did cause a drop in the price at the time, but it has since recovered. With that being said, the case has yet to be resolved. Ripple still has its backers, but the cloud of legal action could cause many to hesitate when it comes to investing in this coin.
As a final trend, expect the unexpected. The world of crypto is known for being unpredictable. Just looking at Bitcoin, who would have expected it to almost double in value in a matter of a few weeks only to lose all of that value just as quickly? Following the trends is important, but you can never discount the potential for something unexpected to happen.
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