If there is one word to describe what has been happening in the crypto world in 2021, it would be ridiculous. There is so much money and value being placed on different cryptocurrencies and their products that to the unobservant eye it may seem a bit too much. While this may be true, the rate of that crypto has been adopted in 2020 may  explain why there is so much hype around it.

The world’s largest cryptocurrencies by market capitalization,  have rebounded from seven-day lows.  Bitcoin was up 8.8% over the past 24 hours, having clawed back more than $3,000 from May 31 lows near $34,200. Many investors believe it is a good time to get into this market. You may Buy Bitcoins in three easy steps,

Here are some of the trends in 2021 that continue to fuel this massive popularity.  Bitcoins,

1.       Big corporations have embraced it

Crypto continues to gain validity across the market as many big corporations adopt it and continue investing in it. Leading payment platforms like Visa, PayPal (News - Alert) and Square have added certain cryptos as a payment method like cash.

With market uncertainties brought about by the pandemic, corporations are also looking to hedge themselves against inflation as well as diversify their portfolios. Tesla has led the pack of big corporations investing in Bitcoin having bought $1.5 billion worth of bitcoin in 2021.

2.       Cryptos have gone mainstream

While many had an idea of what cryptos were, 2020 was the year that the concept really gained interest. With people looking to make some extra money after the economic devastation of the pandemic, many decided to research and experiment with cryptos. The growing distrust with banks and other financial service providers has also increased this adoption.

The increased use is evident as there are already partnerships to allow users to use certain cryptos in their daily transactions. For example, VISA and Coinbase have collaborated to offer a debit card that allows their customers to easily access and spend bitcoin directly from their Coinbase accounts.

3.       The value of bitcoin continues to rise

Bitcoin seems to be the gift that keeps on giving. With heavy interest from individuals and big corporations alike, the value of bitcoin has shot to over $50,000 so far in 2021 with analysts predicting a continued rise. An analyst at Citigroup has given one of the wildest speculation so far predicting its rise to $318,000 by the end of the year.

While it is still yet to be seen whether Bitcoin can keep this crazy growth in valuation, it is crucial to note that it has already crossed the trillion dollar valuation mark and is expected to keep growing especially with interest from corporates.

4.       Ethereum continues to rise

With bitcoin’s valuation keeping many small investors at bay, speculation over the next bitcoin has begun and a few cryptos are now gaining traction. Cryptos such as Ethereum and Dodgecoin are steadily gaining popularity. While Dodgecoin is still considered a by some a joke due to its origin as a meme, Elon Musk has brought a lot of attention to it.

Ethereum however, seems to be a real winner here especially due to its smart contracts feature that enables the execution of NFTs and other DeFi projects that have gained popularity in 2021. It’s valuation has grown from $740 in 2020 to around $1000 in 2021 and is predicted to hit $9000 by some by the end of 2021.

5.       Prices of NFTS (non-fungible tokens) skyrocket

NFTs are the perfect answer to the question, what if ridiculous was the new normal? The ridiculous amounts of money being spent on NFTs may leave you wondering what is normal and what is not. For instance, a digital art by artist Beeple sold for $69.4million while twitter founder Jack Dorsey just sold his first ever tweet for over $2.9 million.

NFTs are digital files such as images, art, music or anything that can be considered as digital art to be auctioned online through the smart contract system enabled by Ethereum and other crypto platforms. This connects the artist and the buyer who can be authenticated as the owner of the original piece of art.

6.       Defi (decentralized finance) grows

DeFi aims to disrupt the financial services industry where corporations like banks and other online financial providers act as intermediaries for different transactions. Defi aims to increase the range, speed and sophistication of such transactions to allow for ease for transactions such as loans, insurance, crowdfunding and even gambling.

Compared to the over $11 billion in DeFi accounts October 2020 the number has grown to over $20.5billion in 2021 and is expected to grow in 2021 as it gains popularity.

7.       Pressure for a bitcoin eft (exchange traded fund)

Pressure is pilling on the US SEC (News - Alert) to create an EFT that will enable investors to invest in crypto directly instead of using exchanges. This move by the SEC would see many more investors get into this trade to bring crypto to the mainstream.

8.       Increased regulation

One of the main draw to cryptocurrencies is that they are decentralized and hence not controlled by a certain government. However, this is a frightening concept to many governments that either see a loss of control through monetary policies or revenue due to reduced taxation.

There is therefore increased calls for regulation in the crypto industry which is already happening to some extent. Identification protocols to identify users are being introduced which may make it easier for governments to track transactions. Some governments such as India and Nigeria have altogether banned crypto trading in their countries.

9.       Calls for CBDCS (central banking digital currencies) intensify

in order to maintain control over their monetary policies, some governments are developing frameworks for a digital currency of their own so a as to maintain a bit of control. China has already started conducting tests on its digital Yuan which will be used a legal tender once approved with the EU Central Bank also pushing for a digital Euro.

10.   Increased scrutiny crypto mining environmental impact

Mining of cryptos is has become one of the biggest energy consumers in the world. The more powerful the computer the more likely it is for one to get cryptos such as bitcoin which has led to excessive power consumption in this pursuit. It is estimated that annual carbon footprint of bitcoin mining is as high as that of Slovakia as a country or Mumbai as a city. This trend is only going to continue.

Conclusion

As it stands, crypto seems to be the future of financial transactions which will replace the need for banks and cash. However, this future is nowhere close and may never even come depending on a variety of factors such as government control. One thing is for sure, cryptos are here to stay and we should find a way of co-existing and making the best of it.