There have been many events that have changed the world of blockchain and cryptocurrencies in 2020.
The transformation of the crypto market was also influenced by the actions of leading central banks. Unprecedented monetary stimulus from central banks, seemingly aimed at fighting the global COVID-19 pandemic, has led to inflation in currencies such as the dollar and euro. This sparked institutional interest in bitcoin. Large investment companies, family offices, and ordinary American billionaires began to view Bitcoin as a safe asset, calling it “digital gold.” Trends will continue in 2021.
It is clear that this will not necessarily be the same, and 2021 will bring insane new adjustments to this forecast, but let’s just imagine what will happen if businessmen continue to actively pour money into the crypto market, and Ethereum and DeFi sector keeps growing at the same rate.
ETH broke the 2017 record and exceeded $ 1,500 at the beginning of 2021. If this trend continues, then the second cryptocurrency will break through its ATH again and reach $ 2500.
Institutional investors will be surprised to see Ethereum rise. Some will participate before, some after the launch of ETH futures in February 2021. As they invest, they will update the legend to rationalize their ETH investment.
The cryptocurrency market cap reached $ 1 trillion at the end of January. If the trend continues, the cryptocurrency will soon become an asset class worth several trillion. A trillion is just the beginning, the market will go far beyond it. Ethereum will be worth over $ 3 trillion.
At least two DeFi protocols are expected to make it into the top 10 by market cap. Some of TOP10 assets of 2020 turned out to be dumb. But it is believed that they will be replaced by DeFi capital assets, which really deserve their appreciation. Among potential TOP10 candidates are AAVE, UNI, YFI, COMP, SNX, and MKR.
DeFi’s market cap is expected to surpass $ 100 billion in 2022.
The high profitability and usefulness of the Ethereum economy will attract new members of the ecosystem who prefer to use their BTC on Ethereum. After all, who knows, people may even start using BTC exclusively on Ethereum. Never say never”!
At least two major banks will accept Ethereum as an infrastructure for mutual settlements in dollar payments. But this is already a story about stablecoins.
Most likely, stablecoin users will try to deal with banks as little as possible and start migrating to the DeFi sector.
The market cap of stablecoins exceeds $ 250 billion. They have three growth drivers. First, DeFi protocols with secured and non-secured coins. Secondly, crypto banks with stablecoins like USDC and GUSD. Third, traditional banks will also come into play. These three engines will bring at least another $ 250 billion in stablecoins to the industry.
USDC will come close to competing with Tether (USDT) in total supply. Tether will face strong regulatory challenges, which will fuel the USDC’s growth.
Delivery of stablecoins for all other non-Ethereum blockchains will be thought of later. Most of the issuance of cryptocurrency stablecoins will continue to take place on Ethereum. On other blockchains, the turnover of stablecoins will decrease significantly.
The stablecoin Libra will be launched, and this will not cause any special excitement on the crypto market, except for a slight fright of representatives of regulatory bodies.
Central banks will start buying Bitcoin. They can start doing it secretly, which, however, we will find out anyway, or they can announce it to express a political position.
The digital yuan will be launched, it will be successful, and the US will be forced to consider a digital currency strategy, but this will still be talk, not action. This may become a major issue closer to the next four-year electoral cycle, likely intertwined with issues related to MMT, UBI, and Chinese dominance.
The tokenization of real assets will continue to lag behind the market because an efficient legal process has yet to be invented. Ethereum’s own assets will only benefit from this since there is less competition for capital and it is easier to create them.
At least one major game studio will announce their intentions to integrate any Ethereum component to integrate NFT assets into their game.
The sales volume of crypto art will exceed $ 1 billion. The digitization of this asset class provides significantly higher liquidity than ever before. Now ownership can be instantly transferred anywhere, to anyone, anytime. Equally important, digital art is broader than traditional art. A work of art can have not only visual aspects, but also sound. Once a handful of popular authors realize the potential, the story will write itself.
Some of the most secure DeFi platforms include Uniswap, Maker, Aave, Compound, and Synthetix. Note that faulty ERC20 tokens from third-party teams can still be attacked!
Yearn Finance is likely to lose funds of some users due to a “wrong strategy.” It is widely believed in the community that the main suspect in attacks on André Cronje’s projects is André Cronje himself.
There will be hype and speculation around decentralized staking providers. This may probably be premature because they will not matter much until the merger of ETH1 and ETH2, which will definitely not happen in 2021 according to the predictions and roadmap of Vitalik Buterin himself.
Mobile apps will be used more often than desktop computers to interact with Ethereum and DeFi, as new entrants to the ecosystem rarely use PCs and are more accustomed to the mobile environment.
Uniswap’s annual volume will reach $ 1 trillion. Trade under the protocol sometimes exceeds $ 1 billion per day.
By the way, despite the fact that Uniswap has surpassed Coinbase in terms of trading volume, the centralized site can still increase its capitalization through an IPO and take revenge. Coinbase’s IPO in traditional markets is valued at over $ 100 billion.
DeFi derivatives will grow. In 2019, stablecoins and lending became widespread. AMM boomed in 2020. In 2021, we will see the derivatives sector finally enter the game on a grand scale. We have reached the point where a robust derivatives protocol ecosystem on the mainnet has finally emerged.
There will be no new “layer1” in blockchains. Polkadot with its cross-chain architecture can deliver a fat point in matters of transaction speed, performance, and scalability. Its development is proceeding at such a speed that if the developers of Ethereum 2.0 maintain their unhurried pace, then by the time of its launch, ETH2 may be on the periphery of the Polkadot ecosystem.
FUD, silence, and outright intimidation from regulators will become ineffective. Despite all this, you will receive tons of offers to invest in cryptocurrency. The community will launch retail FOMO like in 2017 and friends. and a family that knows you are into cryptocurrency will ask for your advice.
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