5 Latest Trends to Watch Out for in the Crypto World
Are you familiar with digital assets? In the past few years, bitcoin became a buzzword in the digital world. Almost everyone started purchasing cryptocurrencies to enjoy lucrative returns in the market without considering its volatility. Therefore, some people were able to capitalize on crypto while others drowned themselves in losses. Today, the crypto world is beyond bitcoin. It is one of the most fast-growing industries with many more currencies, capturing every investor’s interest.
One could say that now is the time to put your savings in the crypto markets. The innovators are bringing top-notch security requirements, closing doors for fraud. Similarly, the crypto service offered by PayPal and the launch of the stable coin – Diem is likely to change the market dynamics. Brands are also starting to accept cryptocurrencies, allowing people to purchase from digital coins. The mass use of digital assets will change payment models, creating a tech-savvy world.
If you don’t know about the crypto markets, keep reading. Here we are listing five trends to watch out for in the crypto world.
1. Growth in DeFi
As more investors look into yield farming, the demand for decentralized finance (DeFi) tokens rises. In turn, the crypto exchanges are expanding their support for the DeFi tokens. Recently, DeFi coin – Ethereum has made its name in the crypto world. Its market capitalization increased by 60%, reaching $40.5 billion in September. To sum it up, DeFi makes up roughly 12% of the total market value in the cryptocurrency market.
Thus, if you want to invest in a currency other than bitcoin, Ethereum could be a perfect choice. However, before going all-in the crypto market, learn about its dynamics inside out. You can look for MBA programs no GMAT with a finance concentration. It will help you learn about the evolution of decentralized finance that is changing the blockchain’s narrative. In addition to impacting institutional investors, it will influence technological considerations in crypto’s ecosystem.
2. Accelerating Demand for Blockchain
Amid the global pandemic, the demand for contactless transactions has increased rapidly. Businesses had to augment their digital infrastructure and introduce new payment modes to serve customers. In short, it led to an increase in demand for tech solutions, one of them being blockchain technology. The savvy decentralized ledgers facilitate the issuance and verification of digital currencies. Hence, ensuring people don’t put their money into bogus digital assets.
Moreover, blockchain technology doesn’t have any intervention from financial intermediaries. It means anyone can purchase and sell crypto without incurring additional expenses. Besides, investors can utilize smart contracts through blockchain to get in touch with the industry leaders. They have in-depth knowledge about changing dynamics, helping you make more informed investment decisions.
3. More Digital Assets
Undoubtedly, 2020 has been a dreadful year for the entire world, but it hosted new record-breaking prices in the crypto sphere. The institutional investors were eager to invest in digital assets that positioned the market for capitalization today. During the last quarter of 2020, PayPal introduced a new feature. It allowed people to buy and sell crypto using their PayPal account, making it effortless for people to deal in crypto.
Moreover, the innovators came up with a fiat-based stable coin; this coin’s prices won’t vary with the currency’s value. Hence, any changes in the exchange rate won’t cause fluctuations in the crypto markets. It would create arbitrage opportunities for investors, letting them sell a coin costing $1 for $1.5. They can multiply it by millions and generate hefty profit on it.
4. Emerging Tax Regulations
Soon, cryptocurrencies will experience tax regulations. Although these taxes aren’t widespread yet, they have begun appearing in some countries. After all, the government sees revenue potential in the crypto markets. Therefore, you will be witnessing mandatory user identification procedures. It will help authorities to track transactions and determine every individual’s tax obligation. Thus, if you try to cut back on taxes, the government will prove how much you are liable to pay.
Likewise, the adoption of legislation on digital assets will put investors under more pressure to increase returns. You will be seeing bitcoin tax evasion lawsuits in the coming years. Hence, start learning about them beforehand to tackle taxes smartly. The government will have exemptions for crypto uncertainties to ensure the investor doesn’t feel overburdened because of taxes.
5. Improvement in Risk Assessments Models
Undeniably, cryptocurrencies are highly volatile. One minute, the price of bitcoin could be touching the sky, while at times, it is lower than other coins. Since not many investors are willing to bear this risk, new risk assessment models are emerging today. It will help users objectively assess the possible result of crypto investments, decreasing the likelihood of losses. It will also evaluate the rise or collapse in currency so that investors can purchase accordingly.
In addition, the risk models will differentiate between genuine and fraudulent currencies. According to Coin Market Cap, we have more than 8,000 cryptocurrencies today. However, only 10% are authentic, whereas the other 90% are fraudulent scams. The risk models have integrated AI-powered servers that look at past patterns to determine currency behavior. Also, the AI servers can track movements of serval currencies simultaneously, giving you accurate results.
Final Words
The crypto world is exploding with innovations and new trends, witnessing rapid growth. But because of the volatility of this market, everyone has to do their homework before investing money. You have to learn about the emerging tax regulations, risk models, and new currencies. After all, many digital assets are performing better than bitcoin. Similarly, learn about decentralized finance and start earning lucrative returns through cryptos.
