Several cryptocurrency industry trends that are still worth paying attention to in 2021

By any measure, 2020 has been a chaotic and unpredictable year. Yet despite all the uncertainty in the cryptocurrency market, 2020 has captured the world’s attention with record-breaking token prices and unprecedented industry news.

Entering 2021, blockchain technology and cryptocurrencies have brought huge profits to institutions and stimulated the rapid development of the industry.

The future is bright for investors, and investment experts expect a massive revolution in the cryptocurrency space. We have summarized the things worth paying attention to in 2021 and hope to draw everyone's attention.

What’s With All the CBDC Madness?

In 2020, some central banks are considering introducing digital currencies, and well-known central bank experts from around the world are currently evaluating the pros and cons of using digital currencies as an alternative to fiat currencies.

The central bank experts come from Germany, Japan, Canada and the United Kingdom, working with the Bank for International Settlements (BIS) to ensure global financial representation.

The Central Bank Group is taking a comprehensive approach to assessing the impact of central bank digital currencies, including cross-border acceptance of central bank digital currencies, economic impacts in transaction countries, and related general functional and technical issues .

China has already launched its digital yuan in four major cities, and more countries are following suit.

Fintech solutions based on blockchain

When the pandemic hit, the demand for contactless financial transactions increased significantly, and most businesses were looking for fintech solutions for their business processes.

A perfect solution for contactless transactions is to adopt blockchain technology and incorporate it into the financial system.

Using blockchain-based solutions, fintech companies are facilitating easier retrieval, issuance, and verification of digital certificates, thereby facilitating contactless transactions .

Bitcoin’s Uptrend

By the end of 2020, Bitcoin's market capitalization had surpassed the $500 billion mark, surpassing major companies such as PayPal, Mastercard, and even Visa.

Since the start of 2021, BTC’s uptrend has continued, reaching a high of $61,000 and remaining above $50,000. Of course, acquisitions by institutional investors and hedge funds may have contributed to this performance.

In addition, well-known companies such as Square and PayPal have also included Bitcoin as a trading option, which has boosted the confidence of retail traders. When large companies invest in digital assets, it enhances the appeal of digital assets and ultimately increases further investment around the world .

The popularity of DeFi

Leveraging blockchain technology to eliminate intermediaries when processing financial instruments or executing financial transactions, DeFi uses blockchain-based smart contracts to facilitate peer-to-peer interactions between borrowers, lenders, and buyers and sellers.

The existence of DeFi simplifies the process of obtaining financial instruments through intermediaries such as banks, brokerages, and exchanges .

At the beginning of 2020, the value of assets locked in DeFi was $683 million, but by the end of the year, its value had increased to $14 billion, a growth rate of more than 2,000%.

Even though they have been criticized in some quarters, high-profile investors like Elon Musk have played a crucial role in popularizing DeFi.

The Future of Ethereum

Ethereum is a cryptocurrency that is expected to gain the most from the popularity of smart contracts. DeFi is based on Ethereum, which means that as DeFi becomes popular, Ethereum becomes more popular.

Investors should keep their eyes on Ethereum for several reasons, including the enhanced functionality coming to Ethereum 2.0.

Through system upgrades, transactions will be processed faster and more securely than all other blockchain ecosystems, and with such improvements, it will definitely attract users.

Ethereum has started the year on an upward trend, with prices reaching an all-time high of $2,000. The surge in price coupled with the above-mentioned advantages makes it a trend worth watching.

Most cryptocurrency investors are obsessed with Bitcoin and its performance and ignore other cryptocurrencies.

However, there are many lucrative opportunities in the cryptocurrency space, and timely trends have begun to form , and investors should be vigilant.

The original text comes from zycrypto, compiled and edited by Blockchain Knight. The English copyright belongs to the original author. Please contact the translator for Chinese reprint.