A new year begins in cryptocurrency, and with it, new developments are brought to the market. We are just a few weeks in 2021, and already so much has happened in crypto. First, the XRP cryptocurrency is facing a lawsuit from the US SEC.
Then, Bitcoin broke it's all-time high, with Ethereum following behind. Finally, crypto is advancing throughout Africa and Latin America.
2021 is poised to be one of the most promising years in cryptocurrency. We’ll review all of the most critical trends and look at how these will impact the year ahead. All of crypto is moving ahead at blazing speed, blink and you may miss the most important trends of 2021.
One of the most important developments for any cryptocurrency has been the US Security and Exchanges Commission (SER) lawsuit against Ripple. The SEC claims XRP is really a security, and Ripple broke the law by distributing it without first registering it. As a result of the legal action, Coinbase has decided to stop all trading of XRP by January 19.
This really threw a wrench on the projected Spark token airdrop. As one of the top exchanges on the planet, many had XRP in Coinbase and were expecting to get Spark in their wallets, but now all that is in limbo.
News has impacted hard the price of XRP, and its price took a nosedive. A problem for the future as right now, most cryptocurrency trading is trading up. It’s possible XRP won’t recover from this hit.
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One of the great stories of 2020, which appears to carry to 2021, is the institutional adoption of Bitcoin.
Many of the essential professional investors on the planet have bought large quantities of BTC, GrayScale being one of the top buyers. The fund bought 12,320 Bitcoin in a single day and now holds 576,650 BTC in their portfolio.
Cryptocurrency markets were set ablaze by the news. As it marks a milestone for Bitcoin and cryptocurrency trading. Finally, crypto is not a niche asset class but one with widespread acceptance in the market.
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One of the biggest news in crypto of 2021 is that Bitcoin broke its previous all-time high. The price of BTC got as far as 41,940.09 USD, more than doubling the old record.
It has been an excellent start for BTC and cryptocurrencies at large. Despite the pandemic and widespread economic challenges across the world, crypto is on the rise.
This is the right time to be in the cryptocurrency markets. The situation we’ll only improve in the medium term, and Bitcoin will lead the charge of general adoption.
Riding high on the tailwind provided by Bitcoin, altcoins are picking up speed. It seems altcoin season is in full swing, and there are profits to be made everywhere. The entire cryptocurrency market is on the rise, and there is no better time to start trading.
One of the great winners of this season has been ADA from Cardano. The cryptocurrency has risen more than 100%, and it has been trending up non stop. All indicators point to 2021 to be the year of Cardano. As the blockchain will launch its smart contracts platform and finally start living up to its true potential.
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At the end of 2020, the Beacon Chain was launched, completing Phase 0 of Ethereum 2.0. It was an enormous achievement for the network and showed the way to a smooth transition to Proof of Stake.
But 2021 will be more challenging in terms of development for Ethereum as the blockchain must launch Phase 1.
Phase 1 is the introduction of sharding into the Ethereum network. It will be the most meaningful update of the architecture of Ethereum and has the potential of breaking up a lot of parts.
One of the most important is composability, as dApps won’t longer be in the same blockchain. This can create bottlenecks and forever change how dApp development works on Ethereum.
Finally, by the end of the year Phase 2 should start. This will mark the final stretch before Ethereum 2.0 is completed. But it is unclear if the core development team will be able to fulfill this deadline.
Not far behind from Bitcoin, Ether has been railing also. The cryptocurrency recently passed the 1,200 USD mark, and it keeps going up. It has still not broken its previous record at 1,448.18 dollars, but all signs point to a new all-time high for Ether in the near future.
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DeFi has significantly been growing in the last quarter of 2020, all the way to January 2021. With projects jumping on the trend all the time.
It seems this year will continue to see healthy growth in the DeFi world. Of course, all this also means congestion for the Ethereum network and high gas fees. Two things that won’t go away any time soon.
Of course, with the crypto high and cryptocurrency trading happening, new crypto exchanges are popping up everywhere. Many are trying to create local exchanges that serve the needs of a niche market. Trying to compete with the giants of the crypto market is hard for those starting, so serving a particular clientele seems to be the new way for 2021.
Some of the exchanges doing precisely this are:
A crypto exchange from Argentina, Ripio is trying to serve the needs of the South American market. It began beta in late 2019, but it started as a full platform in mid-2020. It tries to take advantage of the high inflation and the lack of dollars in the Argentinian market.
Its most popular products are stablecoins pegged to the US dollar. Since many Argentinians see it as an excellent way to save their money. At the same time, they protect the purchasing power against the high inflation of their currency.
Bitinca is another recent addition to the cryptocurrency market. The exchange has been operating for a year from Peru. It is the most used exchange in that country and 12th in Latin America.
It has been growing rapidly in the Spanish speaking world because of its many tutorials regarding crypto for a Hispanic audience.
KikiTrade is a new exchange started in 2020 for the Asian market. Its main claim to fame is that it has 0 fees for trading. Also, the exchange has partnered with Swiss banks to provide the best onboard ramp to the cryptocurrency market. It is one of the fastest-growing platforms in Asia, attracting many millennial investors looking to start investing in cryptocurrencies.
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Crypto adoption in the African continent is exploding. The COVID crisis has impacted the continent harshly, and many have turned to cryptocurrencies as a new way to make money. Adoption of Bitcoin and altcoins has been dramatically rising by more than 100% in 2020.
Especially cryptocurrency in Nigeria. In this country, the first Bitcoin ATMs on the continent have been deployed. But Nigeria is not alone as Ghana, Egypt, Algeria, and Ethiopia also jump into the cryptocurrency market. 2021 may be the crypto year in Africa.
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Another region taking up crypto is LATAM. We already saw that it is one of the most fertile markets for new exchanges, but it also experiences a high level of crypto adoption. Cryptocurrency in Venezuela is on the rise due to the hyperinflation of their economy.
Dash has become the most popular cryptocurrency in the country where it is possible to buy a meal, pay for hotels, and plane tickets using Dash.
If it were not for Venezuela’s terrible economic situation, the country would be at the forefront of crypto adoption. This is where LATAM and Africa are similar; cryptocurrency adoption is fueled by a financial crisis and not by a booming market.
The new heights experienced by the cryptocurrency market are driving FOMO to new levels. As wealthy investors [buy all the Bitcoin,]( https://www.bloomberg.com/news/articles/2020-12-11/bitcoin-btc-rich-investors-are-jumping-into-cryptocurrencies-as-stigma-fades0 they can get their hands-on, and people are left out. Many turn to altcoins and drive the price of these assets up. It is unclear how sustainable this trend is, but there are no signs of it slowing down in the short term.
FOMO will dominate crypto sentiment for a while. As more and more people enter the crypto world, we may see Central Banks and countries finally taking a serious look into cryptocurrencies. This may mean more regulation and a less free crypto economy.
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Finally, with the good news, there is also bad news. As the price of cryptocurrencies rises, more and more scams multiply. Some are old ones, and some are new. But what is certain is that the crypto economy remains a dangerous market for newcomers, and everyone should tread lightly. Some examples are:
## Chain Letter
A common and widely used scam from the early days of email is now doing the rounds in crypto. It consists of a letter promising rewards for those who share it with their contacts, plus a crypto donation to the associated wallet. It may seem highly unlikely that anyone would fall for this type of scam, but it remains one of the most popular forms of theft on the internet.
A new type of scam popular in DeFi is rug pull. These are projects that promise many new features to retail investors who put money into the project. Once the scammers have reached their ‘investment’ goal, they close all communications with users and escape with the money.
It has become a common practice in DeFi, as the new technology has given fantastic returns to investors. But this allure makes it an ideal ground for this type of scam. Some infamous examples are Amplyfi.money, which stole 2,500 ETH from investors, and Burn Vault Finance who did the same with an unknown quantity of cash.
Rug Pulls will be on the rise in 2021 as DeFi keeps growing. It is essential to be aware of all the details before putting money into any new project.
2020 was an excellent year for crypto, and 2021 is shaping up to be even bigger. Cryptocurrency trading will keep growing and making headlines in the year ahead. More and more people will enter the market, and finally, crypto will breakthrough into the mainstream.
Of course, with the good also comes the bad. This new bull run will only embolden scammers trying to take advantage of all the new people entering crypto for the first time. These are exciting times, but it is vital to stay safe in the crypto economy.
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