Top Cryptocurrency Trends to Watch in 2021
Cryptocurrencies have grown in popularity over the past few years, with more and more people investing in them. The year 2020 was a particularly eventful one for the cryptocurrency industry, with Bitcoin hitting all-time highs, and more institutional investors jumping on board. As we look ahead to 2021, there are several key cryptocurrency trends to keep an eye on.
1. Central Bank Digital Currencies(CBDCs)
Central banks across the globe have been exploring the idea of creating their digital currencies. China plans to launch its digital currency soon, while the Federal Reserve has been conducting research on a digital dollar. With the benefits of digital currencies becoming increasingly apparent, we can expect to see more central banks experimenting with CBDCs in 2021.
2. NFTs(NON-FUNGIBLE TOKENS)
NFTs, or Non-fungible tokens, are unique collectibles that live on a blockchain. In recent months, we’ve seen a surge in popularity for NFTs, with some selling for millions of dollars. With this trend set to continue, we can expect to see more artists and creators using NFTs to monetize their work.
3. DeFi(Decentralized Finance)
DeFi, or decentralized finance, is a blockchain-based financial system that allows users to lend, borrow, and trade without the need for intermediaries like banks. In 2020, the value of assets locked in DeFi applications increased by over 2,000%. As DeFi continues to grow, we can expect to see more innovation in this space in 2021.
4. Increased Institutional Adoption
In 2020, we saw several high-profile institutional investors, including Tesla and MicroStrategy, invest in Bitcoin. With more institutions realizing the benefits of investing in cryptocurrencies, we can expect to see increased institutional adoption in 2021.
5. More Regulations
As cryptocurrencies become more mainstream, we can expect to see more regulations being introduced. Governments around the world have already started implementing regulations and guidelines for cryptocurrency exchanges and ICOs. In 2021, we can expect to see even more regulatory activity as governments try to balance the benefits of cryptocurrencies with the need for consumer protection.
Conclusion
There are several key cryptocurrency trends to look out for in 2021, including the rise of CBDCs, increased institutional adoption, and the continued growth of DeFi. With these trends in mind, investors and enthusiasts alike can expect another exciting year in the world of cryptocurrencies.
(Note: Do you have knowledge or insights to share? Unlock new opportunities and expand your reach by joining our authors team. Click Registration to join us and share your expertise with our readers.)