2020 has been a rollercoaster ride so far. The uncertainty of the global economy has shifted the public’s attention to the real-world applications of cryptocurrency. As we are entering the third quarter of the year, an increased number of people wonder how to buy bitcoins, and specific trends start to become more prevalent.
In this article, I will talk about six trends that I found to be the most important and that investors should look out for to navigate through the upcoming bull market more effectively. After reading this post, you should have a better overview of what is coming ahead. Let’s get started.
Trend #1 – DeFi projects
Decentralized finance (DeFi) is becoming increasingly important after observing the challenges of our economy to deal with the COVID-19 pandemic. New financial applications based on blockchain technology receive the same attention as ICO projects did just a few years ago.
Among them are popular new projects that are quickly climbing on the top of Coinmarketcap’s list. These include Compound, Band protocol, and Chainlink, which seems to be the preferred choice of new investors. Take a look at the following monthly chart to get a better idea of the growth that LINK experienced in the past few months:
Trend #2 – Crypto is no longer a “geek” thing
If there is one thing the cryptocurrency space improved in during the past three years, it is the UX/UI of exchanges and wallets. In 2017, many non-techy investors found crypto investing a very difficult task to perform. From the creation of a wallet to the navigation of exchange platforms, most people quickly dropped the idea of investing since it didn’t fit in their field of expertise.
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Today, this is no longer an issue. The interface of crypto wallets and the dashboards of exchanges are simple to use even for older, non-technical generations. Aside from that, popular exchanges like Binance have released a wide array of different products that are more commonly seen in traditional banking (savings accounts, crypto loans, etc.). As such, crypto is not just easier to obtain, but also easier to use.
Trend #3 – Corporations start to buy Bitcoin
Recently, software development company MicroStrategy allocated 250 million dollars to purchase more than 21.000 Bitcoins.
MicroStrategy buys ~$250M in bitcoin, becoming the first publicly traded company to buy the currency as part of its capital allocation strategy (@yogita_khatri5 / The Block)https://t.co/92VDRPkODQhttps://t.co/JjW3SlkI6n
— Techmeme (@Techmeme) August 11, 2020
According to them, the popular cryptocurrency has a realistic potential to offer better returns to their investors. The billion-dollar company didn’t just buy the coins on a “gut feeling.” They ran the numbers. If the world’s top financial analysts believe that an allocation in Bitcoin is a good idea for the long-term future, we can expect more companies to follow suit in the future. And once that starts happening, countries are likely to follow as well.
Trend #4 – Shift to a tokenized economy
Since the beginning of crypto, one thing has become prevalent – people like to get compensated for their actions. By rewarding users with their native tokens, companies can engage them easier. Take the Brave browser, for example. Boasting more than 15 million active monthly users, the digital company has become a crypto-investors’ favorite. Their concept is simple – reward users with BAT tokens for their exposure to ads.
This trend is slowly building up, with more companies offering financial (tokenized) rewards to their users. In the next few years, companies will likely reward users for things that today seem almost impossible, like their personal information or data related to their buying behavior.
Trend #5 – More regulations ahead
Due to the popularity of crypto, governments are trying to ensure two things:
- They “want a piece of the pie” – By imposing heavier regulations and taxes on trades and capital gains, government institutions are profiting from the evolution of cryptocurrency. This comes after several countries have thought about using parts of their energy reserves to mining Bitcoin.
- They make the space safe – Crypto is no longer in the “wild wild West.” Nowadays, countries are allocating large parts of their annual budgets to improve the security of digital payments and cryptocurrency transactions.
We can expect that regulations and laws around cryptocurrency will become tighter as Bitcoin grows in price and popularity. It might therefore be a good idea to remain up to date with all Bitcoin-related regulations of your country.
Trend #6 – The importance of smartphones
It is well known that people browse the web mobile-first. Google has already optimized their search engine for this reason, and exchanges pour large amounts of resources into building a better mobile experience for their users. But where is this trend going?
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With the improvement of UX/UI on both exchanges and wallets, mobile purchases will also increase in popularity. Part of the drive to adoption could potentially be the financial rewards associated with doing so. For example, we can expect to see exchanges rewarding their users when downloading their official app or get token cashbacks when paying using a mobile wallet. Overall, this is part of making crypto more accessible and easier to use by the public.
As we are entering into a new bull market, it is important to follow the market trends and continuously adjust your investing strategy. While some trends are not directly related to the success of your crypto purchases, others play a significant role in the potential of your coins. To sum upon the above, here are the six trends you should keep in mind:
- DeFi projects show promising potential in this bull market
- Cryptocurrency is no longer reserved for tech enthusiasts
- Large corporations are starting to invest part of their capital in Bitcoin
- A global shift towards a tokenized economy is becoming more prevalent
- Regulations and laws surrounding crypto are expected to increase
- Buying and using crypto will be a “mobile-first” experience
Now that you have a better understanding of the crypto trends in 2020, it is time to consider your options carefully. Consider allocating a part of your portfolio towards projects that show promising potential and keep the risks in mind (this is not a financial advice).
This guest article has been done by Julia Beyers. Thanks for your contribution, Julia!
Photo credit: The feature image has been done by Thought Catalog.
Editorial notice: This guest contribution reflects the author’s opinion and does not necessarily match with the stance of the publication.