What they're earning right now: the main trends on the crypto market

Non-exchangeable tokens (NFT), decentralized finance (DeFi) and other popular topics in the digital asset industry

The cryptocurrency market is on the rise again: its capitalization exceeded $2.2 trillion in mid-August, and many tokens again show hundreds or even thousands of percent growth in a short period of time. There are several major trends that are driving the industry right now.

DeFi

The number of blockchain funds in DeFi projects (TVLs) has been steadily increasing. On Aug. 14, that number peaked at $84.7 billion, according to DeFi Pulse. Back last summer, the value was $6.3 billion. Over the past 12 months, the growth has been an incredible 1,244%.

Interest in DeFi is growing among institutional investors as well. For example, Barry Silbert’s Grayscale has launched a new ETF focused on decentralized finance projects. The index from Coindesk will be the basis for selecting assets for the fund. Thus, investors will have the opportunity to earn on DeFi without buying tokens directly.

At the same time, even the largest banks are creating the infrastructure for the new sphere. At the end of July, Goldman Sachs sent an application to the SEC for the creation of DeFi-ETF. The fund will invest in companies listed in the Solactive index. In addition to blockchain and DeFi players, this ETF includes companies such as Nokia, Cisco, Facebook, Google and Accenture.

IDOs are also popular. This is a new way to raise funding. Its peculiarity is that tokens issued in this way are already secured by liquidity pools on DEX. Among recent successful IDOs is Vega, a decentralized derivatives trading protocol that raised $43 million during a sale on the Coinlist platform.

In order to participate in IDO, you need to sign up for a white list (not to be confused with a white paper). Many projects also offer an entry via Telegram or Twitter.

For example, IDO is being prepared by the cryptopayment ecosystem Coinspaid, which handles 5% of all transactions on the bitcoin network. In 2020, 1.25 billion euros worth of cryptocurrency was transferred through the platform and 2.3 billion in 2021. CoinsPaid is also the “Payment Provider of the Year” according to AIBC. The project raised $1.8 million in two private rounds, and plans to raise another $320,000 during the public sale.

The project has a valuation of $16 million and an initial market capitalization of $480k for the new CPD token. The allocation per IDO member is $500 on the DaoMaker Launchpad, and the project is also holding an IDO on SpacePort in late August.

The main advantage of IDO is that such tokens are guaranteed to be placed on a decentralized crypto exchange. So now there is no need to worry and wait for news about the listing.

NFT

In the second half of 2021, the popularity returned to non-transferable tokens (NFTs). In August, trading volume on the OpenSea NFT marketplace exceeded $1.3 billion, though back in July it was only $284.2 million and in June it was $125.2 million (up 560% in two months). While NFT sales were $2.6 million in 2020, in the first half of 2021 that value increased 26-fold, to $95 million.

There have also been high-profile conflicts involving NFT tokens. For example, on August 13, the State Hermitage Museum accused Rammstein band leader Till Lindemann of illegally selling NFTs made at the museum during the filming of the “Beloved City” music video. The Hermitage explained that during Lindemann’s recent announcement of the NFTill project, the museum sent him a warning that he was violating the Hermitage licensing policy, but it was not reciprocated, and the illegal tokens were eventually uploaded to the marketplace.

At the same time, the St. Petersburg street-art artist Pokras Lampas sold the last of the ten items of his “Calligraphic Manifesto” for 2.5 million rubles. The deal was done on Binance marketplace in the NFT format. In total, the artist made the equivalent of 10.5 million rubles in Binance Coin tokens for the entire “Manifesto”.

Large players are also coming into the NFT sphere. The Chinese holding Alibaba Group launched a marketplace of non-interchangeable tokens (NFT) for copyright trading. The project was implemented with the participation of the Sichuan provincial government. The marketplace uses NFTs issued on New Copyright Blockchain. It was created by the Copyright Committee of the Sichuan Blockchain Association. With New Copyright Blockchain, writers, musicians, developers and other professionals can sell their works as NFTs.

That said, experts recommend caution in considering investments in non-interchangeable tokens. Any “hype” leads to market overheating, followed by a correction. Therefore it is worth investing in NFT only if there is a deep understanding of the value of a particular token, as well as confidence in the further growth of its popularity.

Institutional investors

Blockchain startups raised a record $4.38 billion in funding in the second quarter of 2021, a 30% increase over the first quarter. The purchase of bitcoin by large companies has also been a trend. It is known that even SpaceX, owned by Ilon Musk, keeps cryptocurrency on its balance sheet. At the same time, large companies are actively entering the crypto market.

For example, at the end of July, it became known that one of the oldest banks in the U.S. State Street will offer crypto-services to wealthy clients of its funds. The bank plans to partner with cryptocurrency software provider Lukka Inc.

Also in mid-summer, some Bank of America clients got access to bitcoin futures trading. At the same time, financial holding company BNY Mellon joined a uniоn of six banks that plan to launch a platform for trading digital assets Pure Digital.

Meanwhile, large companies are beginning to look for cryptocurrency specialists. In mid-August, Walmart, the largest U.S. retail chain, posted a vacancy for a manager of cryptocurrency products. Also, a senior manager of digital currencies and innovation is looking for one of the oldest British banks Lloyds Banking Group.

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The post was written by Crypto Expert John Belford

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