The meteoric rise in the value of Bitcoin has placed cryptocurrencies on the map as a viable investment choice. Bitcoin has surpassed great heights in terms of value since its conception, just over a decade ago. It is the largest cryptocurrency, with a market capitalization of $1 trillion. Though Bitcoin is the most common cryptocurrency, there are currently over 5000 in use, many of which are listed on cryptocurrency trading apps. The majority of people, however, are unaware of these currencies.
Several digital currencies have outperformed Bitcoin in terms of returns. Ethereum, the second-largest cryptocurrency, has increased by 750 percent since 2020, outperforming Bitcoin’s 600 percent gain.
Many of these cryptocurrencies are now vying with bitcoin for publicity. ‘What is the next crypto breakthrough in 2021?’ investors are beginning to wonder.
The Cryptocurrency Journey
Cryptocurrencies are the most recent asset class to enter the investment world. It was created as a decentralized alternative to the conventional and centralized financial system, but it has since developed into a store of value.
People recognized cryptocurrencies through the prism of Bitcoin, despite the fact that there had been some older forms of digital currencies since the 1980s.
In 2009, an individual or organisation using Satoshi Nakamoto’s pseudonym was identified. Its definition rapidly grew in popularity and attracted worldwide attention.
Eventually, the crypto market erupted with a slew of Bitcoin-like currencies known as altcoins. Although not all of those currencies have proven to be useful, many have proven to be superior to Bitcoin.
What should you be looking for?
Bitcoin has now solidified its status as a valued commodity. Increasingly, investors are looking for something more important than Bitcoin. Although it’s popular to look at the price and market dynamics to figure out which cryptocurrency will be the next big thing, price isn’t the only factor to consider. Rather, investors should look for the digital currency’s functionality and availability. If a cryptocurrency is useful, it can overcome any obstacles, live, and develop.
Another thing to keep an eye out for is shortage and availability. If a currency’s supply is not limited, it may lose value over time as demand outstrips supply, resulting in inflation.
If a cryptocurrency has the following features, it has the best chance of being the next crypto revolution:
- It is transparent
- It has a definitive purpose
- Easily accessible
- There is an efficient and reputable team behind it
- Its network is trustworthy
The Next Crypto Revolution of 2021
The cryptocurrency industry is a melting pot of technological breakthroughs. From time to time, a slew of new cryptocurrencies with high utility and functionality are introduced. Here are a few predictions about how the crypto space will evolve in 2021.
Decentralized Finance (Defi) is a broad category of financial applications based on cryptocurrency or blockchain technology, as the name implies. By removing middlemen and delays caused by a centralized system, Defi aims to increase the speed and efficiency of financial transactions. Defi gives its customers complete control over their funds. It is used in a number of fields around the world, including banking and insurance.
Non-fungible Tokens (NFT) are digital objects that only exist on the internet. Art, sculptures, sports cards, music data, virtual real estate, and other tangible and intangible assets are depicted by them. Each NFT has its own set of characteristics that help users differentiate between them. We may also use the data to check the assets’ authenticity. Since and NFT is special, they are not exchangeable.
- Polka Dot
Polka Dot builds a single network by linking several specialized blockchains. It’s also known as blockchain technology’s next generation. A blockchain can only process a certain number of transactions at any given time. Polka Dot, on the other hand, may process multiple transactions on multiple chains at the same time. Through combining several blockchain networks into a scalable network, blockchain will realize its full potential for realistic applications.
- Yield Farming
It’s part of the Defi network, and it lets users gain cryptocurrency with cryptocurrency. It operates in a similar way to lending money to your mates and gaining interest on the money you’ve lent. Yield farming involves users locking in their crypto assets for a fixed period of time in exchange for incentives. Interest, new tokens, and other crypto coins may all be used to earn rewards. The primary benefit of yield farming is the lucrative profit-making potential that it offers.
The cryptocurrency industry is constantly shifting. There are numerous opportunities for crypto investors in India to develop a strong portfolio, with cryptocurrency apps making substantial progress in easing crypto investment.
Investors should, however, bear in mind that the currency’s functionality should be challenged before making a major investment decision. A cryptocurrency can continue to prosper if it is sufficiently functional.
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