We’re barely a week into 2021 and Bitcoin is already more than 40% up YTD. For many, this year is the one everyone has been waiting for. The sentiment of the crypto markets is bullish and we can see this reflected in the “green” days of the market.
Since we are early in the year, we decided to write a post outlining our thoughts on the upcoming trends in 2021 in the context of the crypto markets. In the next few sections, we will share the things you should be watching out for. Let’s delve in.
Trend #1 - Bitcoin mass adoption
The economic instability caused by COVID19 pushed many institutions to search for safe-haven assets to protect their wealth from inflation. We saw a public company, Micro Strategy, converting its complete balance sheet in Bitcoin during the last quarter of the year, followed by more institutional investments (Square, Grayscale, etc.) as well as new payment gateways from tech giants (Paypal, CashApp). With institutions gaining exposure in Bitcoin, we see retail interest spark up once again.
Trend #2 - Increase in options & derivatives products
With the increase of retail interest, we also see a major segment joining - that of traditional investors. Experienced traders of other financial markets are taking their knowledge and applying it to the crypto markets in hopes of increasing their BTC position over time.
This is true for futures contracts, perpetual contracts, swaps, and most importantly Bitcoin options.
Trend #3 - Continued growth in DeFi
The explosive growth of DeFi in the summer of 2020 led to a new market worth more than $10 billion dollars at the time of this writing. We see major exchanges like Binance releasing many new DeFi projects, and expect to see a complete shift from traditional finance onto decentralized financial applications. This will also have a very positive effect on projects like Ethereum and Solana.
Trend #4 - Growth in NFT markets
Earlier this year we saw the NFT market spiking in terms of growth. This mainly occurred after Bitcoin influencer Anthony Pompliano informed his 100.000+ readers of his bullish potential for digital art. Slowly but surely, we expect creators to “tokenize” their art, and a completely new market coming to fruition. Since NFTs are currently placed on the Ethereum blockchain we expect this to further boost the value of ETH.
What do you think will be the biggest crypto trends for this year? Let us know in the comments below!