Last year blossomed as a convivial one for the cryptocurrency industry. And now, blockchain technology is banked to grow at an astonishing compounded annual pace of 67.3% from $3 billion in 2020 to $39.7 in 2025. On top of that, banking and financial application are expected to hold the majority of the market share as opposed to the present private blockchain type.
With 2021 at the helm of all the rapid changes, here are my picks for trends that shall prevail this year.
1. The Big show: Regulation
With more conventional investors and organizations engrossed by cryptocurrencies, expect significant regulations from different nations. In India, the government plans to bring the Cryptocurrency Bill 2021 which shall impose a ban on private cryptocurrencies (with exceptions) and allow RBI to issue and administer its own digital currency. However, this move was naturally not welcomed by cryptocurrency companies and enthusiasts in the country.
How will it conclude? We’re yet to see.
2. The Steady Mounter: DeFi (Decentralized Finance)
The total value of assets locked in the Defi ecosystem has crossed $40 billion early in Feb ’21, from just $13.6 B in Nov ’20. This emerging peer-to-peer financial service sans intermediaries will grow even mightier. After all, delivering P2P service was the vision of Satoshi Nakamoto.
DeFi’s equitable approach, automated, flexible contracts, and high-interest rates have attracted many investors. Pundits reckon this year may belong to cross-chain technologies. It is seen as a long term solution to scalability issues associated with DeFi.
DeFi Insurance products are also certain to carry forward their momentum in 2021 too. Overall, the future of DeFi looks pretty healthy.
3. The Showstoppers: Paypal and Facebook backed Diem
Paypal now allows its users to buy, store and make payments using bitcoins and other cryptocurrencies. Diem, the Facebook backed stable coin is all set to launch soon after the approval from Swiss Financial Market Supervisory Authority. The entry of these giants will be a catalyst for long-awaited mainstream adoption of cryptocurrency. It’s an exciting space to watch!
4.Late Bloomer: Ethereum
Throughout history, we have seen that adulation of a person will languish the recognition competitor. Ethereum can very much relate to this legend. I personally believe it is much superior to Bitcoin in terms of technology and speed. Ethereum is also the foundation for NFTs and DeFi. Researchers too have pointed out that it is better than Bitcoin on the long run (although it is volatile).
Earlier this year, Ethereum outpaced Bitcoin by making 750% returns. With Ethereum 2.0, the 2021 will give it is set to get the long awaited fame.
5. The Starkid: Stablecoin
Stablecoins are a type of cryptocurrencies whose value is pegged to a reserve commodity such as a fiat currency or gold. Stablecoins have been on and off the headlines for a few years now. In January, top US banking regulator, OCC allowed banks to use of stablecoins to conduct payments.
Stablecoins have a grand reception in the gaming industry. This is because they provide a seamless one-stop solution for the global community of gamers. Companies like Zytara are looking to resolve a variety of gaming and esports payments using stablecoins. Over that,
Also, the Chinese government’s very own digital yuan is anticipated to be launched before the start of the Olympics which commences in February 2022. And as already discussed, Diem can also be into use anytime soon. So, stablecoins are going to be in the limelight this year.
6. The reliable reticent: UX
With crypto on the brink of mass adoption, expect a lot of changes in term design this year!