Ten Cryptocurrency Data Points To Take Away from 2021

Ten Cryptocurrency Data Points To Take Away from 2021

The new decade dawned to be very promising for the crypto sector, leading to increased adoption of cryptocurrencies and the development of new coins. The question of the survival of cryptocurrency has been enveloped by the enigma of their potential to benefit the financial division. Instead of playing the prediction game, we take into account some key data points and infer the possible future of blockchain, cryptocurrency, and tokens in developed and developing economies.

1. The market cap of cryptocurrency climbed above $300 billion.

During the first two months of 2021, the market cap of the crypto community steadily increased from $218.4 billion to $303.1 billion, gaining a whopping 65.92% since the start of the year. The interest in this sector will continue to grow as more funds keep entering the space. After witnessing a higher low in Q4 of 2020, it is expected that the market is pacing up for more powerful highs.

2. Bitcoin is still the top cryptocurrency for investment.

Despite having such volatile value and the pundits estimating only a 4% chance of Bitcoin BTC/USD surging again to the $20k mark in 2020, this cryptocurrency is most likely to have the largest market capitalization. The mining reward will be slashed from 12.5 BTC to 6.25 BTC by May. Given that there are more than 90% buyers and less than 10% sellers, investing in Bitcoin will pace up before the halving event.

3. Crypto is shifting its focus from trading to utility.

GiveCrypto.org made cryptocurrency payments to 5,000 people last year in Venezuela. Out of them, 90% were able to carry out at least one transaction with a local store that accepted crypto. This trend will catch fire in the 2020s, with the best new companies being created to drive the utility phase. At least one emerging market will adopt cryptocurrency usage, and scale it to millions of users, so that the majority of transactions in their economy take place in cryptocurrency.

4. Startups and crowdfunding are relying on crypto more than ever.

The crypto startup is going to become more common. Just like the internet has become an integral part of all new businesses, the cryptocurrency component will also be found in every tech startup. Three things define a crypto startup – it will raise money using blockchain and crypto; the early adopters will be issued tokens; global communities and marketplaces will come at one pace as each country’s payment methods and regulations will be integrated at one time.

5. A drop in Bitcoin's dominance rate is causing altcoins to outperform it.

Bitcoin is currently trading at $6,450, which is 200% down from the record high of $20,000 in December 2017. Since its dominance rate dropped from 68% to 62%, it has allowed some altcoins to pull off outstanding 3-digit rallies in the first two months of the new decade. Some of the prominent performers include XRP XRP/USD, Cardano ADA/USD, Neo NEO/USD, Ethereum ETH/USD, and Tezos XTZ/USD that have the potential to push their values even higher.

6. Ripple has signed over 300 partnerships with banks and other financial institutions.

Unlike other cryptocurrencies, this project is not trying to oppose the prevailing financial system. Rather, it is making an effort to integrate itself into it. Last year in October, the Bank of America confirmed that it is going to work with Ripple's XRP ledger for cross-border payments, but hasn't started using the distributed ledger technology yet. Ripple has already collaborated with big financial names like HSBC, Barclays, Ahli Bank of Kuwait, and MoneyGram, ensuring its existence in the fiscal world.

7. Ethereum price has seen a hike of 32% since the start of the year.

Ethereum started 2020 at $130 per coin but gained an upside momentum, given the boom of the crypto industry. In the middle of February, it saw its highest jump that spiked the coin price to $279. The latest decline in oil price and COVID-19 outbreak lead the coin to face a massive sell-off. However, Ethereum 2.0 is set to launch during the middle of the year and bring back this cryptocurrency to its glory.

8. Central banks are transforming regular currencies into their digital forms.

China started the game by digitizing yuan and making blockchain one of its core investments. Other countries will follow the lines of China and introduce a digital version of their currency. In fact, the U.S. is already on this track. 2020 is likely to be the year when central banks will release digital currencies, especially because international institutions like the International Monetary Fund (IMF) and the Bank for International Settlements (BIS)are supporting the idea.

9. Friendly regulations are boosting crypto adoptions at all levels.

In 2019, many countries were already actively developing legislation to regulate the cryptocurrency market, and the laws are being effective as the first quarter of 2020 reaches an end. The U.S. state of Wyoming has introduced 13 crypto laws in the last two years, making it a digital hotbed for crypto investment. It is anticipated that other prominent bodies and regulators are going to follow suit, facilitating the cryptocurrency environment.

10. Facebook launching the Libra coin.

Facebook's announcement of Libra took the crypto world by storm, causing a significant impact on trading volume and the use of digital currencies around the world. However, the project has witnessed many changes in recent months, and a few prominent names have left it. While Libra's success is still uncertain, it will introduce one-third of the world to digital currencies. Thus, the hike in the value of the coin is inevitable.

The Bottom Line

Given that the world is currently engulfed by a deadly pandemic, which is also taking a toll on the global economy, it is unsure whether the crypto world will benefit from this situation or not. As the cryptocurrency started the year on a positive note, it is expected to stay like that for a few months. There are high chances that cryptocurrencies and blockchain will play a huge role in taking the world out of the new economic recession and pave the way for financial growth.

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