The last two years have been particularly huge in the world of cryptocurrency. COVID-19 played a key role in moving people towards digital transactions and currencies like Bitcoin, which undoubtedly aided the growth of crypto during 2020 and 2021. But what are the current cryptocurrency trends that we are currently witnessing, and which ones are likely to continue into 2022? Let’s take a look.
More commonly known as DeFi, decentralised finance aims to recreate more traditional financial practices and systems, but using cryptocurrency rather than fiat. But doesn’t that rather defeat the point of cryptocurrency? Is crypto not supposed to be the big challenger to these age-old financial institutions? Well, yes.
One of the main hurdles to the mass adoption of cryptocurrency is governments trying to control something which they don’t necessarily understand, and are likely quite scared of. With DeFi, we can have a borderless, transparent and more easily accessible financial system, which still resembles something more traditional and can be more easily understood.
We can make use of digital smart contracts to invest, save, borrow and trade, but without relying upon brokers, exchanges and other traditional financial institutions. DeFi seems like the best way to bridge the gap between crypto enthusiasts, and those in charge who may hold some more old-fashioned views on finance.
On that note, it might be time to prepare for taxation on cryptocurrency. Such ideas have already been floated by several governments in 2021, including India, and this seems set to stay.
Tools are already being developed by some governments, which are designed to monitor crypto transactions, so it won’t come as a surprise to see exchanges being forced to declare customer information to the authorities in an not too distant future.
Non-Fungible Tokens (NFTs)
During 2020, the NFT market really took off, tripling in value to something in the region of $250 million. This upward trend has continued throughout 2021, with more than $2 billion spent on purchasing NFTs in the first quarter alone.
The convenience of NFTs for trading assets, without the requirement to use a complicated, centralised platform, is behind their accelerated use in the world of art. But it seems likely that NFTs will roll out across other industries too, as more people spend increasing amounts of time in virtual environments.
Augmented and virtual reality gaming, as well as the music world, seem like obvious possibilities to become the “next big thing” in the NFT space. But there are many other real-world use cases for NFTs, including microtransactions on gaming sites, as well as the presentation of virtual awards.
Growth of Ethereum
Since many DeFi projects and NFTs make use of the Ethereum blockchain, it stands to reason that if they continue to take off, Ethereum will also boom. The World Economic Forum suggests that by 2025, up to 10% of the world’s GDP will be facilitated by some form of blockchain technology, and Ethereum seems well placed to take advantage of this.
The main attraction of Ethereum is undoubtedly smart contracts, which underpins NFTs and other digital collectibles, but has more far-reaching potential uses in the world of finance. Ethereum would remove all traces of human error or disputes in peer to peer lending, for instance.
This much-maligned generation are very much the people driving the cryptocurrency boom. As more and more information becomes available in the public domain, it makes sense that people will consume this knowledge and develop an interest. Particularly with a generation so internet-savvy as the millennials.
Speculative investment in cryptocurrency such as Bitcoin is not the only attractive aspect to millennials, though. This is the first generation to whom technology is native. They are already extremely comfortable using apps, digital wallets and websites in their day to day lives. Millennials are already using crypto wallets to fund purchases when shopping online, for instance. Another favourite pastime of millennials is online gambling. Already totally au fait with online comparison sites, they possess a real eye for a bargain, and are comfortable shopping around for the latest casino bonuses. These sites also allow players to compare the safest and most respectable casinos, as well as looking into the variety of payment methods offered, allowing people to see whether or not cryptocurrency is accepted.