Digital assets are about to break new records. The rate at which new bitcoin investors are entering the market is ever-increasing. The cryptocurrency market capitalization has broken the $1 trillion mark.
Though the surge in the prices of cryptos in December last year was unprecedented, the following month has surpassed the bullish run. Are Bitcoin and other cryptocurrencies about to begin a more explosive year of bull-run
Last year was a winning year for Bitcoin and other cryptocurrencies. Traders entered early in the first quarter of 2020, while they couldn’t hide their joy when prices made a big move from $4,000 to $40,000 recently. However, the continuous break of record highs seems not to be over yet in January 2021.
There has been a continuous Increase in decentralized finance volume
While an asset’s price is a major factor that hints at an asset’s future direction, the volume is not something to be ignored. The volume of trades can give a clue of where the next direction of the market. In 2020, decentralized financing was one of the most trending crypto topics, and even now, the issue keeps popping up.
Decentralized exchanges give room for anonymous trading to enable every participant to contribute to the market liquidity no matter how small the token is. Uniswap is the leading decentralized exchange.
A report published by Messari Company says the DEXs’ trade volume is about to hit $56 billion in Jan. this year after surpassing a record $26 billion Sept. 2020. Uniswap led Decentralized Finance late last year, while other protocols like the layer-2 solutions for Ethereum by Synthetics are growing steadily too.
$MKR attempting to be the most valuable Decentralized Financing (DeFi) asset. According to the company’s tweet, Maker ($MKR) is fast moving towards five DeFi protocols, each worth 1.5 billion. But Kyber, which once had a great prospect, had its swap protocol moderately small.
Also, some of the rarely seen swap protocols can bring a stunning Layer-2 solution for ETH, significantly bringing down the transaction costs and duration. We could see a pacesetter in Layer-2, possibly backed by a free token, kicking off a new solution.
Bitcoin attracting new investors
Admittedly, Decentralized Finance and Ethereum are gaining traders’ attention at an increasing rate; Bitcoin cannot be said to be doing badly. Although BTC slid heavily after reaching its all-time high of $41,000, it still has good prospects in the nearest future.
Soon, more institutions will invest heavily in crypto. However, it is not yet known if they will want to buy after a new dip has been formed, or they will wait for a new resistance to be broken.
A Chainalysis report reveals some interesting patterns of how long traders keep their positions. Long-term holders and those with less than a month holding have their wallets rising in value. The report also noted that the figures which approached the 2017 high of $20,000 indicate that more buyers are entering the market.
The bitcoin movement’s coverage by the traditional media after their new year break could cause the price to hit another all-time high, adding to the ever-increasing number of Bitcoin buyers and automatically raising the price.
Bitcoin’s trade volume may have slowed down at present; the fundamental outlook is still positive. Undoubtedly, the Bitcoin market capitalization stays a bit above $700 billion as at the time of this report.
By December this year, Bitcoin and other crypto-assets may hit their record highs. This feat is a dream come true for those who have been anticipating a decentralized currency. While records are important, they must be accompanied with volatility in the cryptocurrency market.