The year 2021 is notable for cryptocurrency market developments: we have witnessed the increase in the dominance of several blockchains challenging Ethereum, new all-time heights of several coins, the frenzy of the NFT, new milestones, and a step toward the genuine widespread acceptance of cryptocurrencies. For more accurate and precise information on cryptocurrency, visit the bitcoin trading.
CoinGecko published its quarterly reports outlining these and other factors that shape the market’s future. It is a short overview of the significant aspects that characterize the industry’s present status. To understand where it is, you must know the following trends:
Start of the Altcoin Season
The value of the cryptocurrency market for the first time exceeded $2 trillion. In a short period, the measure virtually doubled, driven by the rise of Ethereum and Bitcoin prices. Both coins repeated their all-time high price points, and for one week, the Bitcoin market limit held at $1 trillion. BTC is the dominant market with 65.2 percent, although, in the previous quarter, its measure decreased by 5.7 percent.
The current trend is the increase of cryptocurrencies, and the market enters the season of an altcoin. The critical sign of the altcoin-led market is the fall in Bitcoin’s market capital versus the entire market capitalization of other crypto-assets, leading to a rise in altcoin prices. It might thus be an excellent chance to diversify your Altcoin range.
Crypto Ecosystem Institutional Adoption
It is historically viewed the bitcoin ecosystem with skepticism by financial institutions and major companies. Many organizations are now doing all they can to devote funds to this sector. It is nowhere more evident than the asset management business. By the end of 2020, it had allocated 15 billion dollars to the crypto-asset class of institutional assets under management. Situation financial custodians make it simpler for customers to deal with cryptocurrency.
Both Paypal and its Venmo affiliate permitted crypto commerce on their systems last year. The statistics from PayPal indicated that customers who purchased bitcoin via the PayPal app had logged in twice as before PayPal permitted these transactions. In addition, on February 7, 2021, the Chicago Mercantile Exchange (CME) is launching ether-based future agreements. Coindesk also observed that since the end of 2020, the number of Bitcoin whales (addresses that have more than 1000 Bitcoin) had risen quickly.
Elusive ETF Bitcoin
Crypto enthusiasts have been pursuing the ETF digital currency for years for mainstream US investors. The US Securities and Exchange Commission (SEC) has frequently rejected or postponed Bitcoin ETF applications for future decisions. One of the most widely talked about funds, the VanEck provider, saw its final approval decision repeatedly pushed out.
Certain commentators feel that introducing a major Bitcoin ETF may provide digital currency a substantial boost by opening up the sector to investors willing to join without some of the dangers of purchasing and selling tokens directly.
DEX Coins Rise
Since the beginning of the year, the Defi market value has increased 382 percent, reaching a new all-time high of $95.7 billion. Ethereum and Binance Smart Chain’s total value locked (TVL) reached $72 billion. The sustained rise of Defi in Q1 is with the equivalent growth of other Defi sectors. In this timeframe, Ethereum has almost quadrupled its supply of stable currencies, DEX volume has grown 2,5 times, and the actual value of outstanding loans has increased three times.
Around 50% of DeFi’s entire market value is in DEX native tokens such as UNI, SUSHI, and CAKE. These three coins exhibited a significant increase in the first quarter. The price for one CAKE, for instance, was about $0.64 on January 1, then at some time, the price jumped to $44.18.
The Lead goes to Stablecoins.
As one of the oldest stables to enter the mainstream, Tether (USDT) has many well-recognized growth problems during the development of the sub-industry. Other stable coins have already joined the field to shake off its supremacy.
Binance Slowly Eating out the Ethereum Market
In the first quarter of 2021, the Binance Smart Chain (BSC) was the second most active blockchain, increasing its user base by 61 percent. The blockchain peaked, which several indicators may illustrate:
- The number of single active wallets increased by 50% a month.
- The average number of active wallets per day was 105,000.
- Native coin of the network, BNB was the third-largest market capitalization cryptocurrency and hit an all-time high of $690.93.
The BSC ecosystem continues to change and expand, although Defi remains a significant emphasis for dApp developers. It offers projects numerous possibilities to discover their specialty – many of them have explicitly joined the network for this purpose.
Regulation Is Necessary
In the crypto market, 2021 is to be a year of more regulatory certainty. The insane situation of the ICO in 2017 led to an age of increased government monitoring. And legal issues about the nature of cryptocurrency have continually confused regulators themselves. The case of Ripple shows this tendency nicely. In late 2020, the SEC launched a complaint against Ripple Labs, which claimed that, when it sold much of its XRP coin to the public, it bought about $1.3 billion of unregistered securities. The CFTC also filed civil enforcement proceedings against major bitcoin exchange BitMEX.
This lawsuit claims that BitMEX operates an unlicensed trading platform and violates CFTC anti-money laundering measures. In the financial market sector, many hope that in 2021 it will introduce the first cryptocurrency ETF. In October 2020, the SEC announced it is working aggressively on laws that enable the marketing and trading of bitcoin ETFs. However, former SEC officials and crypto experts have frequently expressed optimism for short-term change in legislation.
The Office of the Currency Comptroller (OCC), previously headed by the former General Counsel for Coinbase, has also taken several creative moves during the last year. They included allowing financial institutions to be custodians of the crypto assets of their customers. The Chairman’s Financial Markets Working Group has also just published a Stablecoins Statement and is further studying the subject.
Ethereum Scaling Solutions Development
The increasing interest in Defi and crypto, in general, has highlighted Ethereum’s well-known difficulties with scalability and network congestion. Gas charges soared by over 400 per cent due to strong demand. Ethereum presented Layer 2 remedies to the problem.
- Optimism has been for projects such as Uniswap and Synthetix.
- Popular NFT markets such as OpenSea, Decentraland have relocated to Polygon.
- Balancer and Cuve work on solutions from ZK Rollup.
- DxO attracts smaller projects.
A project must consider the technological features of solutions and services currently available in Layer 2. Many projects may follow Uniswap and Synthetix to remain linked to more considerable liquidity and projects.