The meteoric surge in the value of Bitcoin has put cryptocurrencies on the map in the investing world. Bitcoin has exceeded incredible heights in terms of value since its debut more than a decade ago. While Bitcoin is the most popular cryptocurrency, there are more than 5000 cryptocurrencies in circulation today, most of which are listed on the CoinSwitch Kuber app. Most cryptocurrencies, however, are lesser-known to investors.
Many digital currencies have generated spectacular returns when compared to Bitcoin. Ethereum, the second-largest cryptocurrency, has grown by 750% in the same period since 2020, outperforming Bitcoin’s 600% returns. Many of these cryptocurrencies now share the spotlight with Bitcoin. Investors start wondering, ‘What’s the next crypto-revolution in 2021?’
- The crypto-monetary industry is a melting pot of technological advances
- DeFi is definitely the next crypto boom with a $79 billion market capitalization
- Decentralized Exchanges are at the centre of DeFi
- Uniswap is the largest exchange in DeFi
- NFT’s (Non-fungible tokens) are digital assets having an online existence exclusively
- Yield farming is also the next big thing in cryptocurrency with $6.6 billion in growth
- Crypto ETFs are also going to be launched into the market
- Security tokens offerings also have made their way into the next big thing after cryptocurrency
Next Big investment Options After Cryptocurrency
The cryptocurrency industry is a melting pot of technological advances, where many high-utility and high functionality coins are occasionally introduced. Here are a few new trends in the crypto space in 2021:
DeFi is definitely the next crypto boom with a $79 billion market capitalization. Decentralized Finance (DeFi), as the name indicates, is a variety of financial applications based on cryptocurrency or blockchain technology. As an open financial system, DeFi seeks to enhance the speed and efficiency of financial transactions by removing intermediaries and delays unlike a centralized system(like banks and other financial institutions). DeFi gives direct control of money to its consumers. It is utilized in numerous sectors, including banking, insurance, etc. around the world.
Decentralized Exchanges (DEX)
A decentralized exchange (DEX) is a peer-to-peer (P2P) marketplace where crypto buyers and sellers can connect. In contrast to centralized exchanges (CEXs), decentralized platforms are non-custodial, which means that when transacting on a DEX platform, the user retains possession of their private keys (like passwords).
At present, Uniswap is the largest DEX platform in DeFi. Essentially, it’s a software combination based on the Ethereum blockchain. Uniswap allows individuals to trade cryptocurrencies via smart contracts. These smart contracts help people to safeguard their private keys(like passwords). Uniswap does not keep any of your data(like your password) in its database but instead we have to keep it safely. Hence we are responsible for our details or data.
NFT (Non-Fungible Tokens)
NFTs are digital assets having an online existence exclusively. They symbolize distinct and intangible objects such as art, paintings, sports cards, data on music, virtual property, memes, tweets, etc. Each NFT has unique information that allows users to differentiate between various NFTs. We may also check the validity of the assets using the data. Similarly, each NFT is unique, it is not exchangeable.
Polkadot links several specialized blockchains to a single network. It is also known as the blockchain technology of the next generation. A blockchain can often only perform a certain amount of transactions at a certain moment. However, Polkadot may execute several transactions simultaneously on several chains. With Polkadot, Blockchain can build its full potential for practical applications. This is possible by bringing together numerous blockchain networks in a scalable network(like Polkadot).
It is part of the DeFi network and enables users to acquire cryptocurrency by lending their existing cryptocurrency. It is much like lending money to your colleagues and collecting interest on the amount loaned. In return for rewards, yield farming asks its customers to lock crypto assets for a certain duration. Rewards in the form of interest, new tokens, other cryptocurrencies, etc may be obtained. The main advantage of yield farming is the profit-making option.
Possible Crypto ETF(Exchange-Traded Funds)
Reports by the SEC (Securities and Exchange Commission) said that investors may soon have access to a new and more classical way to invest in cryptocurrencies, through a cryptocurrency ETF (ETF means a collection of cryptocurrencies). An ETF is like a basket of cryptocurrencies that are sold in an exchange. An ETF cryptocurrency would allow investors to purchase cryptocurrencies directly via standard investment agents, such as Fidelity or Vanguard, which may already have accounts with them.
You may add crypto to your portfolio straight from the same brokerage you currently have a retiring or other traditional investment account in. However, investing in an ETF crypto, though diversified, comes with the same risks as regular cryptocurrency investments.
In 2021, Bitcoin met social media and this has given birth to creator coins. For example, BitClout is a social media platform that blends Bitcoin investment with social media success. In short, individuals may monetize their followers by selling them Bitcoin/cryptocurrencies. This process of followers buying this currency increases its worth. This would be beneficial to people with a huge following.
This next-generation model has been developed by entrepreneurs Jordan, Luke, and Jackson Lintz of HighKey Enterprises. HighKey Coin is a “creator coin” designed for content creators to monetize their followings.
Instead of generating money through sponsorships or ads, content-driven companies are valued for their unique content and their ability to attract a following.
STO ( Security Token Offerings)
STOs are blockchain-based tokens that represent actual assets, stocks, debts, or future profit rights. Unlike traditional ownership rights, like in the case of stocks or bonds, they are smart and have built-in rules and behaviours. Pretend there’s a stock that pays out automatic dividends, that’s a real improvement, right?
STOs may be the next best application for blockchain after digital payments. STOs use blockchain to represent and transfer ownership rights. As you see, modern securities are non-intelligent pieces of paper with an electronic copy. They can’t act on their own. Sending, receiving, storing, and clearing traditional securities transactions is a complex and time-consuming process.
With STOs, many of the operations now done by numerous intermediaries may be automated. They are smarter ownership rights — digital programs instead of paper. Their built-in rules and actions run automatically.
For example, STOs can help transform P2P lending platforms into private loan markets. This will allow lending directly to a small business or to another person to fund their business idea. This concept will be popular because it gives users control over their finances.
With the mentioned automation, STOs can become a new approach to facilitate capital movement. Historically, only a few super-rich could afford a luxury Manhattan skyscraper. Now, STOs may make investing in private assets as simple as clicking a mouse. Smart contracts can conceal investor and territorial limitations, as well as administrative tasks like declaring and paying dividends.
Buildings, yachts, automobiles, or even private unlisted firms may be owned by a far broader audience of investors with much less paperwork and no expensive intermediaries.
The market is young, but the potential is huge. They’re like piling roads on top of one other. STOs often replace the current financial market infrastructure, but individuals are naturally attempting to integrate them within the current legal and regulatory frameworks.
An STO can be expensive. Companies considering an STO often hire an army of attorneys and engage in long discussions with regulators to understand (create) the procedure. First ‘proto’ advice shops are developing to help entrepreneurs and corporations effectively execute STOs.
STOs (when done appropriately and lawfully) may be an innovative, paperless, and frictionless means of linking investors to premium, alternative projects that have previously only been accessible to a few super-rich.
The market for cryptocurrencies is always evolving. With cryptocurrency applications like Coinswitch Kuber making substantial progress in facilitating crypto-investments, crypto-investors in India have countless chances to develop a solid portfolio. However, investors should remember to investigate the operation of the currency before making a major investment choice. If a cryptocurrency is sufficiently functioning, it will still flourish.
Download the CoinSwitch Kuber app and start your crypto investment journey now!
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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