Cryptocurrency trends to look at next year
The world of cryptocurrency has been on a roller coaster tour of ups and downs in the last ten years, with prices that float wildly based on the feeling of the market and technological progress. When we enter a new year, experts provide significant trends that will modify the future of this space. In this article, we will take a closer look at some of the most exciting cryptocurrency trends to look next year.
1. Greater adoption by institutional investors
Since institutional investors such as hedge fund and pension funds feel more comfortable with cryptocurrencies, their investment wallets are moving towards digital activities. This greater adoption should increase the encrypted demand, bringing to higher prices and greater market capitalization.
According to a report by Deloitte, the total value of the cryptocurrency detained by institutional investors reached $ 143 billion in 2020, compared to only $ 20 billion in 2017. While more institutional investors enter space, their stakes are growing and with them there is an increase in liquidity and market activity.
2. Growth adoption in traditional companies
Cryptocurrencies are no longer only for fans; Traditional companies are starting to adopt them as a way to increase efficiency and reduce costs. Companies such as Microsoft, IBM and Amazon have already incorporated the cryptocurrencies in their payment systems or use them alternatively to traditional currencies.
The growing acceptance of cryptocurrencies between traditional companies will lead to significant growth in adoption rates, making it easier for people to participate in space. As more companies follow the example, we can expect to see greater interest from consumers in these types of transactions.
3. Greater attention to decentralized finance (Defi)
Decentralized finance (Defi) is a rapid growth segment in cryptocurrency markets. Difi platforms are allowing users to lend and borrow cryptocurrencies without the need for intermediaries, reducing transaction commissions and increasing liquidity.
According to a colatasysis ratio, the Defi transactions grew by 400% in the fourth quarter of 2020 compared to the same period last year. This growth will be expected to continue in the new year, with more defined definement platforms and existing ones that expand their offers.
4. Passes towards the digital currencies of the Central Bank (CBDC)
The digital currencies of the Central Bank (CBDC) are gaining traction while governments around the world begin to explore their potential benefits. CBDC could revolutionize the way we think about currency, providing a digital alternative to traditional Fiat currencies and potentially reducing transaction costs.
The European Central Bank has already launched its CBDC called E-CUR/EN, which is currently in beta test. 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 that want to reduce their dependence on traditional currencies.
5. Increase in regulation
As cryptocurrencies obtain greater traditional acceptance, regulators around the world are starting to take note of them. Governments are repressing unregulated exchanges and institutional investors ask for more severe regulations.
The Commodity Futures Trading Commission (CFTC) has released a declaration that asks for greater transparency in cryptocurrency transactions, while the authority of the European Union titles is launching a new regulation aimed at protecting investors in cryptocurrencies.
6. Greater attention to security
The computer security threats in the cryptocurrency space are becoming increasingly important, with hackers that aim for exchanges, wallets and individual users.