Despite the recent slump, crypto investing is still off the charts hot. In fact, no technology in human history has seen such rapid adoption, not even the internet. Here are you some investing trends in crypto that you should know of.
Do you want to get in on the action but don’t know where to begin? Investing in cryptocurrencies can be a daunting task.
While this article isn’t investment advice, we’re here to perhaps point you in the right direction.
The cryptocurrency industry is booming, with the entire market capitalization of all cryptocurrencies now nearing $2.6 trillion.
Despite this, there are currently only about 100 million crypto users worldwide. Many others have jumped aboard, and many more will do so in the future. To say there is room for growth in an understatement.
Keep your eyes on these trends
Here are the most important trends in the crypto sector right now.
NTFs
Increased interest in and purchase of non-fungible tokens.
One of the most intriguing developments in the crypto ecosystem is the introduction of non-fungible tokens (NFTs).
Nigel Green, CEO of financial advisory firm deVere, said that the (NFT) market would experience a large growth in trading volume over the next year and beyond.
Green stated that the NFT market reached new highs in the second quarter of 2021, with sales of US$2.5 billion ($3.4 billion) so far this year. “This is over 20 times the $13.7 million in the first half of 2020,” he said.
“Demand is set to surge with increasing interest from large investors like payments giant Visa, who realize and value that the future of practically everything is focused towards digital.”
Are you unsure what an NFT is? An NFT is a one-of-a-kind digital file.
You can make as many copies of a digital file as you like, including the art that comes with an NFT. NFTs are intended to provide you with something unique: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork).
It is worthwhile to conduct your own study into NFTs and determine which ones to purchase within your price range, as they will improve in value over the following five years.
Altcoins Ascending
Altcoin Sherpa, a pseudonymous trader on Twitter, has told his 130,200 followers that the recent price spike in smart contract platform Terra (LUNA) has convinced him that Solana would break out sooner than planned.
An altcoin is a cryptocurrency that functions similarly to Bitcoin. Because Bitcoin is commonly considered as the first cryptocurrency, new cryptocurrencies are referred to as alternative coins, or altcoins.
These are some of the best cryptocurrencies to research if you want to beat the market during what might be a historic period in the altcoin history:
Solana (SOL)
Avalanche (AVAX)
Decentraland (MANA)
Enjin Coin (ENJ)
The benefit of altcoins (with the exception of Solana and Avalanche which are fairly pricey) is that they are far less expensive than the other major coins, allowing you to purchase more.
We’ve given you the links as a first step. Research first, ask lots of questions and educate yourself before making any buying decision.
DApps Expansive Growth
What’s a DApp? It is a decentralized application, or software that runs over a distributed peer-to-peer network.
The market for decentralized applications has enormous potential.
According to DAppRadar, total DApp transaction volume will climb to $271 billion in 2020, up from $21 billion in 2019.
Many DApps that run on the Ethereum blockchain provide DeFi capabilities.
Did You Know: Approximately 45 percent of new DeFi DApps were running on the Ethereum network.
- DeFi Ethereum applications handle 95% of DApp transaction traffic
- There are approximately 2,000 DApps running on the Ethereum blockchain
Stability with Stablecoins
Tether (USDT) is an example of a blockchain-based cryptocurrency whose tokens are backed by an equivalent number of US dollars in circulation.
Stablecoins track typical fiat currencies, such as the dollar, euro, or Japanese yen, which are stored in a separate bank account.
Did You Know: Tether searches have rocketed over 1,400% in the past five years.
Crypto gaining institutional adoption
The largest banks in the world, including JPMorgan Chase, Goldman Sachs and others, are becoming more interested in investing in cryptocurrency. Online payment giant PayPal is also going all in on crypto.
Historically, financial institutions and huge organizations have viewed the bitcoin environment with skepticism. This, however, has changed.
Many organizations are now doing everything possible to allocate capital to this field. By the end of 2020, the crypto asset class has received $15 billion in institutional assets under management. This has continued to accelerate.
As an example, consider PayPal: Last year, PayPal and its affiliate, Venmo, both authorized crypto trading on their systems.
DeFi
The growth of DeFi (decentralized financial) applications has garnered the most attention to the crypto community this year because both institutions (and regular folks) can see the advantages of decentralized finance.
DeFi is an umbrella term for a wide range of financial applications based on cryptocurrencies or blockchain that aim to disrupt financial intermediaries.
- Since 2017, search interest in decentralized finance has increased by 8,900%
- DeFi protocols employ traditional financial transactions that occur on a blockchain
- Smart contracts are used to enable these transactions
- Unlike typical payments or transfers, they do not require the use of financial middlemen
- DeFi transactions vary from regular loans to derivative speculation
Final thoughts
The cryptocurrency market, like the stock market, is highly volatile. This is due not only to advancements such as NFTs, but also to general market volatility with popular coins such as Polkadot and Cardano, as certainly with meme coins like Shiba Inu and Dogecoin.
However, you can be assured that innovation in this sector will continue, and there’s no telling how much it will expand over the next decade. With only a fraction of the global population invested in cryptocurrency, the upside for adoption is massive, as are the potential profits to be made.
Finally, we cannot stress this enough, do your homework. Make sure you understand the ins and outs of whatever project you are about to invest in and even then talk with a trusted financial advisor before putting any of your hard-earned “real” money at risk.
Jay Speakman is a technology writer based in San Francisco, California. He writes on the topics of blockchain, cryptocurrency, DeFi and other disruptive technologies. Clients include Avalanche, Be[in]Crypto, Trust Machines and several blogs devoted to blockchain gaming. He will not rest until fiat currency is defeated.
