Cryptocurrency trends show that the climb will be slower but will move forward nonetheless in 2021

Cryptocurrencies have been on the market for some years now. But it saw unprecedented growth in 2020 which is expected to be a stepping stone for the upcoming years. Cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology, a distributed ledger enforced by a disparate network of computers. The digital asset has undoubtedly proven to be among the most profitable investment opportunities, beating the profit from conventional stocks and commodities such as oil and gold. Amid all the hectic situations, the digital asset space seems to have proven that cryptocurrency will make a solid case and become a safe haven in an increasingly uncertain world.

Earlier, cryptocurrency has evolved in three cycles, alternating between periods of high activity and the so-called ‘crypto winter.’ However, 2020 was the year when cryptocurrency began its long climb out of the trough of disillusionment. In the present year, the climb is anticipated to be slower, but it will move forward nonetheless. Remarkably, there are several potential developments projected to take place in 2021 and beyond that could impact institutional participation in the digital currency market. IndustryWired brings you a list of cryptocurrency trends that will take over the 2021 digital asset market.

A big year for Ethereum

Ethereum is an open-sourced, blockchain-based, decentralized software platform used for its own cryptocurrency, ether. It enables smart contracts and Distributed Applications )DApps) to be built and run without any downtime, fraud, control, or interference from a third party. Ethereum is predicted to be one of the front running cryptocurrencies in 2021. Ethereum is officially beginning Eth2, a new currency model with upgraded processes. This is making investors curious about how the new digital asset will outperform all other coins.

Stablecoins take a stand

Stablecoins are cryptocurrencies that attempt to offer price stability and are backed by a reserve asset. Stablecoins offers instant processing and security to payments on cryptocurrency. It gained a wide range of attention and investments recently when people became familiar with its volatility-free stable valuations. Blockchain Capital has reflected that the number of Stablecoins in circulation surged by over 500% in 2020 naming the currency as ‘one of the most-used payment networks in the worlds.’ The value of digital coins is anticipated to surpass US$150 billion in 2021.

An influx in institutional money

The US election and the incoming Democratic administration had a huge impact on the 2020 cryptocurrency market. Predictions showed that the Democratic administration will facilitate the generation of even more money than has been created throughout 2020. This will immediately reflect on the digital asset price spike in 2021. Bitcoin is already replacing gold as an investment solution that hedges against inflation. Henceforth, Bitcoin will continue to emerge as the smart money overtaking gold in pension funds, family offices, hedge funds, macro investors and corporations allocation.

Maturation of cryptocurrency

Large mainstream cryptocurrency companies will start accelerating innovation in Decentralised Finance applications where it can be used to collateralize loans, borrowings and other financial instruments, rather than being a stagnant investment. At least forty countries are experimenting with digitizing their fiat sovereign currency. Tokenizing cryptocurrency will increase blockchain distributed ledger financial transactions and accelerate technology adoption.

Ripple to make a significant move

 Ripple is a technology that acts both as a cryptocurrency and a digital payment network for financial transactions. Ripple operates on an open-source and peer-to-peer decentralised platform that allows for a seamless transfer of money in any form. Experts predict that 2021 is the best time to buy Ripple, as the price is still comparatively low and affordable. However, they give a heads-up that the digital coin will see a huge spike in the coming years and the investors can avail the benefit when it reaches its peak.