Over the years, the crypto economy has been on the rise. And this has seen the market value for the crypto market hit the $2.5 trillion mark. This market value is so immense that it has surpassed that of the biggest company in the world-Apple.
You might be wondering how the crypto economy achieved such a significant milestone. This achievement is thanks to the unpredictable returns on investment and privacy of crypto. Similarly, cryptocurrencies have made bypassing state regulators during international transactions easier.
The rise of cryptocurrency began with the development of Bitcoin as the first crypto. And up to now, Bitcoin is the most popular cryptocurrency with a market value of $1.6 trillion.
According to recent research, the number of crypto unicorn companies greatly increased last year, 2021. In fact, these companies increased exponentially by 491% in 2021. With this incredible growth, there isn’t a doubt cryptocurrency is here to stay.
Top Five Cryptocurrencies
The crypto market has grown to over 1,300 cryptocurrencies in the last couple of years. Here are the five most popular cryptocurrencies by market capitalization.
Bitcoin.
It’s the first cryptocurrency in the crypto market. And up to now, it remains the most commonly used crypto in the world. As stated above, this crypto sits around $1.6 trillion by market capitalization. Over the years, this crypto has been in the spotlight because of significant swings in its price.
Ethereum.
It’s the second most popular crypto. And its market capitalization is above $18 billion. Unlike Bitcoin, Ethereum is a programmable currency. This nature makes it easy for developers to create apps and other technologies around it. At the same, it can process programs and contracts besides transactions. As a result, this blockchain code has launched numerous crypto so far.
Ripple.
The crypto got founded in 2012. And up to now, it has a market capitalization of more than $10 billion. Unlike other cryptocurrencies, Ripple can track other transactions apart from cryptocurrency. And as a result, some banks like Santander and UBS have used this crypto,
Litecoin.
By market capitalization, Litecoin is so far estimated to be worth $5 billion. The development of this crypto was right after that of bitcoin. Therefore these crypto are so much similar in form. Yet, transactions with Litecoin are incredibly faster than with Bitcoin. This speed is thanks to the development of innovations with a great mining algorithm. Also, these innovations have amazing processes that allow for more transactions.
Monero.
Monero is open-source crypto based on Bitcoin. But unlike Bitcoin, it has a highly developed algorithm. This algorithm enhances the security and privacy features of the crypto. However, users are afraid it might not be secure because of its open-source and opacity nature. Thus the weak growth of the crypto.
These cryptocurrencies are just a tiny fraction of the currently existing ones. However, the rest of the cryptocurrencies have a long way to go to catch up with Bitcoin.
Key Trends in Cryptocurrency
Over the years, the crypto market has shown incredible growth. And with key trends playing a significant role in this growth. Here are some of the main trends that have greatly shaped the crypto economy.
1. Future of Finance
A significant number of financial institutions have adopted digital assets. And this has disrupted traditional finance and challenged its existence.
Over the years, there has been a serious adoption of digital assets. At the same time, institutional investors have held cryptocurrencies in their balance sheets.
Also, most businesses and countries have already declared digital assets as legal tender. And many others are on the same journey.
Decentralized Finance (DeFi) is among the many trends drawing huge attention in the crypto market. This development involves traditional transfers and payment but on the blockchain network.
For many years, middlemen have been a great inconvenience in traditional finance. However, DeFi applications get rid of intermediaries, thus making transactions faster. As a result, DeFi applications are on their way to replacing traditional banking.
With DeFi applications, you can enjoy a variety of transactions. A variety of transactions ranging from derivative creation to traditional lending. At the end of last year, 2021, the amount of crypto dedicated to DeFi was worth almost $100 billion.
2. The Rise of NFTs
One of the remarkable developments in the crypto industry is Non-Fungible Tokens (NFT). NFTs are digital assets that have a digital signature attached to them.
By owning these tokens, you have a digital claim over an asset. The item you claim can either be physical or digital.
Thanks to NFTs, you can represent your claim on an asset. Assets like video games, artworks, music, or even domain names. In fact, thanks to NFTs, the art industry is now finding it easier to solve copyright and ownership issues.
The creation of NFTs is thanks to the Ethereum blockchain. And as a result, you can only use Ethereum as the only crypto when buying NFTs.
Due to the fragmented nature of the NFTs market, it’s nearly impossible to estimate its size. However, looking into individual marketplaces makes it easier to find a clue.
In August 2021, OpenSea registered a transaction volume of $3.4 billion worth of Ethereum. And this amount is ten times more than that recorded in July the same year. OpenSea is the largest NFT market so far.
In fact, crypto gaming investments amounted to 9% of the total funds in the gaming industry. And this amount is still on the rise.
3. Stablecoins
Up to now, the concept of stablecoins has gained tremendous momentum. It’s despite Tether, the most popular stablecoins, facing legal issues. Up to now, the market value for stablecoins has exceeded $157 billion.
Over the last five years, Tether has had exponential growth of 828%. And as a result, Tether continues to dominate half the market value for stablecoins.
Most DeFi applications usually use stablecoins due to their price stability. So if you’re thinking of entering a decentralized transaction, stablecoins is the way to go.
Stablecoins prevent the value of your capital from reducing because of volatility.
4. Metaverse
Metaverse is a virtual space created in the digital world with crypto and NFTs powering it. The native currency for buying digital goods in the metaverse is cryptocurrency.
The metaverse has seen remarkable growth in the last five years as people continue to spend more time in it. And as a result, the market for digital goods is growing spontaneously. The most popular digital goods are virtual real estate, game items, and digital art.
With the rise of the metaverse, digital goods have become a norm for even high-class consumers. For example, brands like Dolce & Gabbana have started creating and selling digital goods.
5. Mining and Staking of Crypto
Crypto mining is the process of making new coins and validating crypto transactions. And staking is committing your crypto assets to help support a blockchain network. And in the process, you get to earn attractive rewards.
Staking and crypto-mining have seen insane growth over the years. In fact, the number of crypto users worldwide has grown to over 300 million over the years.
At the same time, the number of crypto mining and exchange platform has increased. And this has made mining and investing in crypto even easier. Such platforms include Binance, Etoro, Crypto.com, and Gemini.
Even better, most of these platforms have created better and more convenient ways of using cryptocurrency daily. One such development is the use of Crypto debit and credit cards.
With these crypto cards, you get to earn rewards anytime you make purchases with them. For example, with a Crypto.com card, you earn rewards through purchasing and staking.
On the other hand, a Club Swan card enables you to earn rewards through referrals. And by referring, you earn 20% of the membership fee paid directly to your account.
For the last several years, the crypto market has been unpredictable. Not only because of the volatility of crypto prices but also through incredible trends. Some of these developments are NFTS, Crypto Credit, and debit cards. And not to forget about the metaverse.
The crypto market has shown absolute unpredictability and momentum so far. And at this pace, the crypto economy will certainly grow even further.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes