2020 was a year like no other. The year was chaotic, eventful and is finally drawing to an end. In the crypto sphere, 2020 was memorable as it hosted new record-breaking token prices and unprecedented industry news.
Read more about what happened in 2020 here.
With wider adoption and greater institutional interest, the digital assets and the blockchain industry is riding on the fast lane to greater growth in 2021!
Here are 5 trends to look out for in 2021
More Institutional Players In The Digital Assets Game
Digital assets witnessed wider adoption in 2020, hinting at greater institutional interest in Bitcoin, as well asother digital assets.
Compared to previous years, institutional investors seemed more willing to venture into, and explore, digital assets in 2020 — positioning the market for even greater growth in market capitalisation in 2021.
During the last quarter of 2020, Paypal allowed customers to buy and sell Bitcoin and other virtual currencies using their Paypal accounts, in addition to offering Bitcoin as a payment option for over 26 million merchants.
Square, the company that owns Cash App, made a $50M investment in Bitcoin, demonstrating a significant interest in the cryptoconomy.
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future,”
Square’s Chief Financial Officer, Amrita Ahuja.
With prominent, multinational companies like Paypal and Square taking the lead, the stage is set for other institutional players to get a piece of the crypto pie in 2021.
Further Development of CBDCs
Central Bank Digital Currencies were discussed with great fervour in 2020.
Several central banks across the globe are exploring the launch of their own central bank digital currencies. The Central Bank Group — made up of experts from The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS) — are conducting extensive research on CBDCs, analyzing the benefits and drawbacks of releasing such a currency in their home jurisdictions.
The Central Bank Group will invest in a collective effort to assess CBDC and its use cases, encompassing economic, functional and technical design choices, and cross-border interoperability.
Countries like China are already well ahead of the curve, having already launched pilot trials for the digital RMB, a digital form of China’s currency distributed by the Central Bank, in four main cities.
Accelerated Demand for Blockchain Solutions, Beyond Financial Use-Cases
When the global pandemic struck, demand for contactless transactions rose significantly . Many industries were cornered into accelerating their digital transformation to augment their business processes, and keep up with new challenges. This led to an increase in demand for tech solutions, one of them being blockchain technology.
Financial services aside, blockchain solutions such as OpenCerts.io, which facilitates the issuance,verification and retrieval of digital certificates became crucial, owing to social distancing regulations and the lack of graduation ceremonies for the class of 2020.
It appears that our soil is fertile ground for fintech growth - Singapore placed among the top blockchain leaders in the world, alongside the United States, China and Europe. The same survey conducted as part of The Singapore Blockchain Report 2020 revealed that blockchain technology emerged as one of the top trends for Singapore in 2021.
Growth in the DeFi Sector
DeFi was undoubtedly one of the hottest topics in the crypto space in 2020.
In February 2020, the total value locked (TVL) in DeFi crossed $1 billion USD, prompting celebrations from the Ethereum community. Those figures have since increased exponentially over the course of the year, with the current total value locked in DeFi at $14.32 billion USD.
With more investors dabbling in yield farming, coupled with the rising demand for DeFi tokens, leading crypto exchanges have expanded their support for DeFi tokens with its growing interest.
The DeFi sector will continue to evolve and grow, and possibly be subject to tighter regulations come 2021.
Greater Heights For Bitcoin and Other Digital Assets
Earlier last week, Bitcoin crossed $500 billion in market capitalization, eclipsing Visa, Walmart and Samsung. As many would have observed, crypto prices were highly volatile this year - at the time of writing, Bitcoin and Ethereum are seeing 1y gains of around 290% and 447% respectively, ending the year on a very remarkable note.
With greater regulatory support, wider adoption, and heightened institutional interest, Bitcoin and other digital assets may just be poised for even more phenomenal growth in the year to come.
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