In the United States, the authorities were concerned about the impact of cryptocurrencies: the Securities and Exchange Commission began a fight against bitcoin ETFs, and the launch of the Bakkt bitcoin service for institutional investors did not inspire optimism on either side.
Serious growth began during the pandemic – the markets were falling, and the crypt, in contrast to them, grew. Over the year, bitcoin has gone from $ 3.8 thousand to $ 19 thousand. Large investors began to actively invest in bitcoin against the background of the devaluation of the dollar. The result of BTC in 2021 reached $ 63.6 thousand, however, then there was a correction, but it is difficult to underestimate such a result. Bitcoin is now worth $ 39.9 thousand.
Crypt “catalysts”
Like any other currency, bitcoin, or rather, its volatility, is highly dependent on the support of market influencers, news from companies and banks.
Roughly 15% of Americans currently own digital currencies such as Bitcoin or Ethereum. Most of these investors have acquired digital assets in the past two years.
Much of the public history of cryptocurrency support began with MicroStrategy CEO Michael Sailor being the first among his peers to endorse Bitcoin. True, he did it not in the most positive way. Sailor was seriously alarmed by the emergence of cryptocurrency and predicted the complete defeat of fiat money. Despite the fact that his statements caused more confusion, it led to a snowball effect.
Another human catalyst for cryptocurrencies is Elon Musk. The Techno King and CEO of Tesla is adept at using his social media and headlines to advertise cryptocurrencies. So his name was literally explosive for the Dogecoin memo coin, and then Musk bought bitcoins worth $ 1.5 billion. Tesla recently announced that customers can buy cars with bitcoins. True, then the company changed its mind and thereby brought down the crypto rate by 15%.
One of the first adherents of cryptocurrencies was the pioneer of digital transactions PayPal. It provided people with the ability to buy and transact with cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. While crypto enthusiasts have criticized PayPal for preventing users from transferring their digital assets to a private wallet, it is possible that this feature will appear in the future.
Visa and Mastercard, two of the world’s largest payment systems, have also publicly approved the use of bitcoins. For example, Visa allows stablecoin transactions on the Ethereum blockchain. Mastercard followed suit and recently announced that cryptocurrency transactions would be available later this year.
Crypto institutionalization is also promoted by crypto-exchanges – for example, Currency.com, which have already become a platform for trading with digital and fiat money, tokenized exchange-traded assets.
Promising cryptocurrencies, which are called the most profitable today
• Dogecoin appeared as a meme with a dog on the avatar. But in seven years, the capitalization of the comic cryptocurrency reached $ 78.8 billion. Elon Musk himself contributed to this, who published on his Twitter message that his company SpaceX will launch Dogecoin into space – after the publication of the post in half an hour, the cost of the altcoin increased by 20%.
• Bitcoin’s competitor – Ethereum Classic, a hard fork of the ether – appeared due to the division of the community, part of which was in favor of optimizing the functionality. As a result, the crypt has shown a monthly growth of 500% during its existence. And the largest altcoin in terms of capitalization reached $ 3.5 thousand in May 2021.
• The service token of the OKEx cryptoexchange also operates on the Ethereum blockchain. It is used to calculate trading fees, vote, and become a Verified Merchant. The market capitalization of the token has reached $ 9.7 billion.
• Bitcoin Cash emerged four years ago after the split of the main Bitcoin network. Today, the altcoin is priced at $ 542.
• Blockchain platform for issuing Waves cryptographic tokens showed rapid growth in April 2021 – rising from $ 10 to $ 43. The platform allows you to create your own cryptocurrency and conduct ICOs.
Why tokenize stocks and paintings
Another important part of applying blockchain to trading on a crypto exchange is asset tokenization. In essence, this is the same process that was applied to the idea of ​​a currency by creating cryptocurrencies. Developers create a token and then link it to the price of a security, provided that one token equals one share. Moreover, today, when the NFT token market has developed, it has become clear that everything can be tokenized: from videos to works of art.
The most important advantage of tokenized assets is a complete transition to the blockchain: the technology protects all records, it is almost impossible to forge or steal them. The digitalization of working with assets also makes life easier for investors and crypto exchange workers. As a result, costs are also reduced – market participants save on expensive bank transfers and bypass intermediaries by buying tokenized assets directly from issuers.
Today, you can buy or sell tokens on many crypto-exchanges, for example, there are such opportunities on Currency.com. Many crypto exchanges provide no-fee trading conditions to owners or buyers of tokenized assets.
The same technology was used to create a new version of bitcoin, the need for which arose as a result of the growing popularity of the decentralized finance (DeFi) market. Bitcoin tokenization made it possible to transfer the digital currency to the ERC-20 ETH format, in which it can already be used in DeFi: for example, it can be used in decentralized projects to make a profit through blocking them for the needs of protocols.
What are the prospects for cryptocurrencies
Despite the success of cryptocurrencies over the past two years, it is difficult to make any predictions: the crypto market behaves too unpredictably, especially in crisis situations.
However, the blockchain is expected to continue its integration into financial markets. The developers are already working on the next generation protocols – Ethereum 2.0, Algorand, Cosmos, Polkadot, which means that in the near future there will be second-tier scalable solutions for existing blockchains. In addition, experts predict blockchain consolidation at all stages of the market chain, from developers to users and the top of the market.
The technological advancement of blockchains will bring big dividends to developers: in addition to forks, analysts predict a wave of mergers and acquisitions, when, as one blockchain becomes obsolete, each token will be exchanged at a fixed rate for another acquirer token. Most likely, there will be as many tokens as there will be open source companies in this market.
A separate area will be the promotion of non-commercial, but useful services for humanity – the use of crypt for non-commercial purposes. Crypto startups will become commonplace: by the end of the first half of the 1920s, almost every tech startup will have a cryptocurrency component at its core.
The relationship with government regulators in many countries remains vague or unclear. Bitcoin is legalized or at least allowed for use by individuals in Japan, USA, Singapore, Switzerland, Canada, Denmark and Sweden. In Russia, the situation remains unsettled. The reasonable fear of many states that crypto can completely replace fiat and make banking systems obsolete atavisms is well-founded. It is not yet completely clear whether Bitcoin will receive legalization around the world, or will remain in the shadow segment where the state seeks to tightly control the financial market.
What we are already seeing is a real revolution in the financial sector. Many analysts tend to call this a colossal disaster for investors. But one thing remains clear – cryptocurrencies have become a new technological response to the inability of an aging economic system to respond to modern challenges – be it a pandemic or a shortage of chips. Because the crypt is not based on a natural hydrocarbon, but on the “gold” of the future – mathematics.
