Following the outbreak of the COVID-19 pandemic, many investors started looking differently at cryptocurrencies, especially after many digital assets had a major appreciation amid the crisis, which led many to buy bitcoin.
While traditional investment markets depend a lot on centralized decisions and how governments will react in the face of different outcomes, cryptocurrencies are digital assets that run on the blockchain, a decentralized ledger that is immutable and public.
In this article, you will find out a perspective on the returns of cryptocurrency in 2021.
The Cryptocurrency Market in 2021 – Summarized
So far, cryptocurrencies are surfing a bullish wave in 2021, as more and more traditional players enter the cryptocurrency market, including companies such as Visa, PayPal, and Tesla. For example, the industry’s most traditional currency, Bitcoin, has already risen 91% this year.
Bitcoin’s value depends a lot on the supply and demand equation, meaning that as the market demand for Bitcoin is increasing, its available supply is decreasing. Currently, the asset’s circulating supply is around 18,690,000 BTC, which promises a huge appreciation in the bitcoin price until the end of 2021.
The NFT Revolution
However, the crypto industry is much more than just Bitcoin. In this sense, there is a category of digital assets flying off the radar of many investors – NFTs (Non-Fungible Tokens). Currently, this category is mostly used for purposes that include digital art, collectibles, and virtual gaming items.
According to the digital art platform Crypto Art Data, their marketplace has moved around US$ 493 million since 2018 in more than 175 thousand financial transactions, which means an average of US$ 2,818 sold per work in the NFT category.
A great example of the success of the NFT industry is digital artist Mike “Beeple” Winkelmann, who raised US$ 69 million (33,000 ETH) at an auction early last month with his digital work “Everydays: The First 5000 Days”.
Beeple photographed every day, from May 1, 2007, to January 7, 2021, and put the images together in one piece, creating the most expensive NFT ever sold to date.
The Cryptocurrency Market Beyond Bitcoin – Most Promising Assets in 2021
Boasting a US $ 12.9 billion market cap, Stellar (XLM) is a blockchain network created for storing and transferring crypto-based funds. It was created in 2014 as a solution to increase cross-border financial integration in different regions of the world.
The network’s main task is to provide a platform for low-cost payment services. Currently, the network transaction fee is fixed at 0.00001 XLM.
Stellar has successfully integrated with several fintech companies. A few years ago, it launched the “World Wire” project in partnership with IBM. Plus, it incorporates the idea of decentralization in the network’s functionalities.
For instance, the network allows users to vote in the decision-making process when adding new companies to the Stellar ecosystem.
Accordingly, the XLM token is gaining exponential adoption worldwide, especially after Grayscale Investments created a fund exclusively dedicated to Stellar’s digital asset.
Recently, Germany’s oldest bank, Bankhaus von der Heydt, announced the creation of a euro (EURB) stablecoin on the Stellar blockchain, the first token of this type issued by a banking institution.
Binance Coin (BNB)
Undoubtedly, crypto exchanges will be the biggest winners in the crypto frenzy coming ahead n this year, including the traditional – and centralized – Binance exchange.
Launched in China in July 2017, Binance has the highest unmatched trading volume, offering users the possibility to buy, sell, trade, and swap hundreds of crypto assets within their platform.
It is impossible to deny the impact Binance has had on the cryptocurrency market in the last five years. According to a statement from founder Changpeng “CZ” Zhao, the digital asset exchange would generate profits between US $ 800 million and US$ 1 billion in 2020.
Plus, Binance’s growth prospects have a decisive impact on its native token, Binance Coin (BNB), which is still one of the most valuable assets to buy and hold in 2021.
An additional advantage of holding BNB is the reduction of trading fees at Binance and the possibility of using the token to purchase other tokens in periodic sales campaigns.
Indeed, cryptocurrencies were never so popular as they are nowadays. However, experienced crypto investors/traders know that this market is volatile, which means it is crucial to go stay far from the hype and concentrate on assets with real value offer.
Bitcoin is likely to remain the world’s most valuable digital asset for a long time, despite the appreciation of dark horses like Ethereum (ETH) and Binance Coin (BNB). Another promising altcoin is Stellar’s XLM, which is climbing its way to the top of the market.
However, the rise of NFTs will certainly impact the way investors interact with cryptocurrencies, as
non-fungible tokens represent the pinnacle in terms of interchangeability and scarcity.