The crypto market is constantly changing due to changing consumer demands and technological advancements. Discover the top Bitcoin trends to watch.
Bitcoin is undoubtedly the most important virtual currency. It also has the largest market capitalization, accounting for nearly half of the entire crypto industry. Besides, it’s the crypto industry pioneer, leader of the crypto revolution. This gives Bitcoin a solid competitive edge, with the most significant influence in the broader crypto market.
Like other sectors, the crypto market is also undergoing constant changes, mainly due to the changing political, economic, social, technological and legal environments around the world. Tracking these changes is essential for every crypto investor, as they determine market conditions. This could help you avoid risk and maximize profits over time. Here are the top Bitcoin trends to watch.
Institutional adoption
While Bitcoin adoption has grown significantly in recent years, major financial institutions are skeptical of the crypto. Some banks have expressed concerns about Bitcoin’s ability to destabilize national currencies and disrupt their operations in the past. However, things have changed as many institutions are now increasingly adopting Bitcoin.
The asset management industry is one of the areas where Bitcoin adoption has grown exponentially. Over $15 billion in institutional assets under management had been allocated to crypto by 2020. That was five times more than the previous year. One Bitcoin Trust saw a 900% increase in the value of its crypto assets over the same period.
Many institutions are increasingly investing in Bitcoin, indicating its growing acceptance as a means of payment and a store of value. Larger financial gateways make it easier for the general public to transact in Bitcoin and other cryptocurrencies. For example, some have bitiq.org/es/ to facilitate secure and convenient transactions.
Decentralized Finance (Defi)
Decentralized finance (Defi) applications are also among the hottest topics in the crypto community. The concept primarily involves performing traditional financial transactions such as money transfers, loans, and creating derivatives on the blockchain. However, the transactions do not involve third parties as in conventional systems. Blockchain technology supports smart contracts, which makes it possible to perform such transactions.
Reliable reports indicate that the total value of crypto assets pledged in smart Defi contracts increased from $2 billion to $15 billion in 2020. Today, that value has more than doubled to just under $100 billion. of dollars. Yield farming is one of the most popular Defi applications that involves lending Bitcoin and other crypto assets to other platforms for interest.
The growing interest in decentralized finance has created more real-world use cases for Bitcoin and other cryptocurrencies. Decentralized exchanges have also become more popular over the past year, allowing people to transact directly without intermediaries. These trends impact a higher market demand for Bitcoin relative to its decreasing supply, making it more valuable over time.
NFT
Non-fungible tokens (NFTs) have gone mainstream in 2021, and experts believe they will remain an important part of the future of the crypto landscape. Tokens represent digital claims or ownership of various physical or digital assets such as domain names, artwork, video game add-ons, and collectibles. Bitcoin is a fungible token, which means that it does not warrant any claim on any asset. Instead, users can exchange their Bitcoin for other cryptocurrencies or assets.
Many NFTs use the Bitcoin blockchain, with embedded smart contracts describing the physical or digital asset they represent. While the market remains segmented, many NFT platforms have reported increased weekly trading volumes. The area has even attracted major art auction houses.
Apart from the above trends, Bitcoin is also under scrutiny from government regulators around the world. Many governments continue to raise questions about Bitcoin regulation, and some have even issued outright bans on crypto. However, no universal consensus exists on the issue.