With cryptocurrency's grip on the world ever-tightening, many new trends have come to surface. Whether you simply like to stay updated or are part of the scene yourself, it would behoove you to learn about these latest industry trends so that you can take advantage of them and make a profit for yourself if need be.
Financial firms and large enterprises have been tentative about investing in the Bitcoin ecosystem for a long time. However, many are now taking steps to invest money into this area. The asset management business is one prime example of this. By 2020, $15 billion was being managed by institutional assets--a fivefold increase from 2019 when only two billion USD were present in the cryptocurrency asset class.
Although this number is small in comparison to other asset management businesses, it might increase with future regulatory changes. One reason for this shift is that consumers find cryptocurrency easier to use than following financial regulations. Last year, PayPal and Venmo both allowed crypto trading on their platforms and found that people who purchased cryptocurrency through the PayPal application logged in almost twice as much as before.
?Decentralized finance, or DeFi for short, has been garnering a lot of attention in the cryptocurrency world. The concept is that traditional financial transactions are carried out on a single blockchain. This also eliminates the need for banking middlemen entirely, which is different from how traditional payments and transfers work.
DeFi is still in its early days, with plenty of room to grow. This can be seen plainly by looking at the TVL (total value locked), which represents the total amount of cryptocurrency held in DeFi smart contracts. In 2020, this figure grew from $2 billion to an impressive $15 billion, according to DeFi Pulse. And growth has only accelerated in 2021: since the beginning of the year, TVL has nearly doubled and now stands at around $35 billion.
Lending digital currencies to other networks in order to gain interests or new coins is called yield farming, and it has become one of the most well-known DeFi applications in recent years. In some ways, yield farming is similar to online banking.
The most recent trend in blockchain technology are non-fungible tokens, more commonly NFTS. These act as a digital representation of an unique item or asset that can either be virtual or real. This is opposed to fungible tokens and currencies, such as bitcoin, which don't always reflect an actual physical object. Being exchangeable and able to be divided into smaller units makes them much more liquid than NFTs. However, some examples of what could be signified by an NFT are domain names, video game accessories, virtual artwork, or collectibles.
Many NFTs have smart contracts embedded which state the real or virtual object that they are symbolizing. This can typically be done using the Ethereum blockchain. According to sources, by October 2021, the monthly trading volume of NFTs reached $15 million. It is projected that this number will increase given the market capitalization of Ethereum's NFT industry rising from just 3 million USD in January to thirty-three million USD.
In layman's terms, decentralized apps (DApps) are software programs that operate over a P2P network. The market for DApps has bags of potential and many use DeFi technology. Further, 45% of all observed DeFi Dapps utilize Ethereum's blockchain according to research done buy DAppRadar.com. Lastly, Ethereum is seeing an uptick in transaction volume recently.DeFi Ethereum apps make up for 95% of all DApp transaction volume. According to recent figures, over 3000 DApps are based on Ethereum's blockchain. Some of the more well-known examples include SuperRare and Uniswap. However, systems like TRON and EOS are beginning to take away from Ethereum's market share by being able to offer free transactions and much greater scalability than other decentralized platforms-two areas where Ethereum falls short.
By being up-to-date with the latest trends in cryptocurrency, you can take advantage of any opportunities that come your way. Whether you're interested in cryptocurrency or the metaverse, staying informed about industry trends is essential to making profitable decisions.
