How Cryptocurrencies Will Dominate the Financial Market. As transactions and users of digital currencies like Ethereum and Bitcoin have grown steadily and quickly over the past few years, cryptocurrency has experienced consistent and significant growth.
Cryptocurrencies Will Dominate the Financial Market
The blockchain-powered currency launched by Facebook has shown the world that the crypto market is still alive and has many capabilities, even though most cryptocurrencies had a stagnant year in 2020.
Cryptocurrency could be helpful in the long run, especially if new ideas lead to a faster, more effective, and safer pay method!
By the end of 2021, cryptocurrencies will rule the financial market due to their promising and quick growth. Here are some numbers and statistics that show the progress these digital payment methods have made so far:
- A total of 350,000 Bitcoin transactions take place every day, on average, according to an article from The Next Web.
- According to a report by ICOdata.io, 857 Initial Coin Offerings (ICOs) raised $6 billion in 2017.
- A report by Finder shows that 4.68 percent of millennials have already invested in cryptocurrencies.
Based on the numbers we’ve seen so far, the future of cryptocurrency holds a lot of promise.
So, let’s look at how it will change the financial market forever.
No More Banking Barriers
Americans have always had a lot of faith in banks and consider them the most dependable option for financial transactions. But the changes in the financial ecosystem showed that this old system had many problems.
PwC statistics show that 60% of traditional banks are willing to work with FinTech startups, and 82% think these partnerships will grow in the coming years. The survey also says that 77% of incumbents have already adopted blockchain technology.
On a side note, the World Bank estimates that 56% of adults worldwide (or 1.7 billion people) lack access to a bank account. If people who don’t have bank accounts start using them, it would add more than $600 billion to the global economy every year.
Also, a big part of this population has a smartphone, which means they can easily buy and store cryptocurrencies safely with digital wallets that are free to use on smartphones.
Significant Milestones in Crypto Bull Run
There were more than 500 different kinds of new digital currencies, networks, and wallets available decades ago. But only five of them are still around today. When a research paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” was published in 2008, cryptocurrency gained the necessary traction.
Also, things started improving in 2015, when a 21-year-old named Vitalik Buterin created Ethereum, the second public blockchain. In later years, it was used as a crowdfunding platform for Initial Coin Offerings (ICO).
Since then, it has only gone up and has never turned back. Both Bitcoin and Ethereum grew by 3,000% and 2,000% suddenly.
In the pandemic situation, Bitcoin experienced a steady rise in December 2020, breaking through $20,000 per BTC. This means that the cryptocurrency market saw a growth of $597 billion.
Despite the volatile stock market, some reports claim that the volatile virtual currency has gained more than 170% this year.
This rise in Bitcoin caused a surge in the prices of other cryptocurrencies, or “alt-coins,” like Ether, the Ethereum Blockchain’s native currency. Bitcoin and Ether had an excellent start to 2021, with a rise of almost 10% to 30% in prices.
Plethora of Opportunities
More than 35 million new users joined the cryptocurrency ecosystem years ago, more than 94% of all users last year. Also, that’s only 1% of the world’s population, and mass adoption has yet to happen.
Investors and cryptocurrency enthusiasts are looking for an opportunity to capitalize on the growing popularity of exchange-traded funds (ETFs).
In the financial market, cryptocurrency gave rise to some opportunities, including:
- The Idea of Bitcoin ATMs
In June 2019, there were more than 5,000 Bitcoin ATMs worldwide for the first time.
They are spread across 90 countries. June proved to be the most fruitful for this technology, with 150 installations at a rate of 6 per day.
- Surge For New Talent
In 2018, there were more than 5,700 jobs related to blockchain listed, of which the US provided more than 2,600 blockchain-based offers. The demand for blockchain technology talent skyrocketed as a result.
- Growth of Stablecoins
Stablecoin is a type of cryptocurrency that is becoming more popular. It has stable prices and is backed by a reserve asset. By offering payments to incumbents like Visa to lower the costs of international transfers and data processing, stablecoins may experience growth in 2021 and the following years. There is also a chance that banks will use stablecoins to digitize their back offices.
The Rise of DeFi
Finance that doesn’t use centralized financial intermediaries is known as DeFi (Decentralized finance). It depends on open protocols like blockchain and Ethereum. With its distributed ledger for loans, insurance, margin trading, exchanges, and other financial services, DeFi’s project is a part of Ethereum’s ecosystem.
The success of DeFi will depend on how technology changes and how people feel about it over the next few years. The most recent development points to a bright future for DeFi in 2021 and the following years. A sizable portion of Ethereum’s vast ecosystem comprises DeFi projects. The Lightning Network is Bitcoin’s practical DeFi application.
With the surge in user numbers, DeFi is ready to tackle the problems and keep progressing in 2021.
The Takeaway
The progress of cryptocurrency is not just limited to the financial market. The banking industry is also revolutionizing as a result. Ripple, a blockchain company, is helping financial institutions improve their cross-border transactions, which make up more than 27% of the revenue from transactions worldwide. Cryptocurrencies Will Dominate the Financial Market