Some significant developments have set the next few years in the crypto market up to look very different from the last few years. As we head into this new decade, it’s almost remarkable how much different the crypto market looks than it did some years ago.
To dive into this idea a little further, here are five specific ways in which the crypto market appears to have changed during this year amidst the pandemic.
1. We’re Seeing More Investment Methods
Plus500’s overview of CFD Trading explains some of the details of this practice, which allows people to trade in both directions (buying and selling), and which is active 24/7. As for futures trading, meanwhile, it gives investors the option to buy crypto assets in the future at prices that are already agreed upon — another way of betting on movement without actually buying coins.
A few years ago, investing in cryptocurrency meant one thing: buying and holding it. In 2020, however, it can mean a few other things as well, such as CFD and futures investing.
2. Stablecoins Have Emerged
In the article entitled “Why Stablecoins Are Securing the Future of Crypto World,” authors discuss the growing tendency of financial institutions to show interest in stablecoins, which has resulted in the fairly sudden emergence of Central Bank Digital Currencies (CBDCs). But between these, Facebook’s Libra, and options like Tether and its expanding list of imitators, stablecoins have indeed become center-stage topics in the crypto world, and are poised to alter the landscape significantly in the coming years. To an extent, they all represent the same idea: a sort of hybrid between crypto tech and backed, “stable” currency.
3. Altcoins Are Gaining More Clout
This time, while we aren’t challenging Bitcoin’s current value, we have data to back up the idea that altcoins are entering the new decade with a bit more clout. Bitcoin ranks only fifth in this category, with DASH, Binance, IOTA, and NEM boasting greater ROI.
It’s often predicted that one altcoin or another is gaining steam, or posing a genuine threat to Bitcoin’s supremacy.
4. Lightning Network’s Potential
It is believed that the Lighting Network will significantly expedite peer-to-peer transfers of Bitcoin (even in very small amounts) — potentially to the extent that some altcoins that were developed specifically to make these transfers easy would be made obsolete. There are some hints that Lightning Network could come into play this year, though it’s hard to say so for sure. Bitcoin’s Lightning Network has been discussed for years now, sometimes in terms that suggest it’s some sort of savior for the leading cryptocurrency.
5. The Safe Haven Narrative May Be Decided
The early returns when economic calamity hit were not strong; in mid-March, a negative take on cryptos was reported, suggesting that it was not performing as a haven in the face of market collapse. Since then, however, cryptos and Bitcoin, in particular, have rallied significantly. Nevertheless, it may still be too early to make a ruling on the safe-haven idea. How Bitcoin and other cryptos perform at this moment could significantly alter how we view them moving forward.
The year 2020 may also give us the answer to the popular question of whether or not cryptos can be safe havens in times of crisis. This is not merely something crypto advocates have suggested, but rather an idea that’s worked its way into the general public’s perception of cryptocurrencies.