Cryptocurrency has been experiencing high trading volume recently. Even if you open a blog about stock markets, you will definitely find several articles about cryptocurrency and its growing popularity. So, why is the cryptocurrency industry on the rise? Well, there are several reasons.
Increased institutional adoption
Institutional investors are increasingly seeing cryptocurrency as a viable investment asset class. This is due to a number of factors, including the increasing maturity of the cryptocurrency market, the growing body of research on cryptocurrency, and the development of new financial products that make it easier for institutional investors to invest in cryptocurrency.
The rise of decentralized finance (DeFi)
DeFi is a financial system built on blockchain technology and eliminates the need for intermediaries such as banks. DeFi has become increasingly popular in recent years as it offers a number of advantages over traditional financial systems, such as greater transparency, lower fees, and access to a wider range of financial products.
The COVID-19 pandemic
The COVID-19 pandemic caused serious economic challenges, including inflation and market volatility. That’s why a lot of people turned to crypto trading, hoping it would help them mitigate the risks. Cryptocurrency is seen as a relatively safe asset class, as it is not subject to the same level of government or central bank intervention as traditional financial markets.
The development of new cryptocurrency projects
There are constantly new cryptocurrency projects being developed, and some of these projects have been very successful. This has helped increase awareness of cryptocurrency and attract new investors. For example, the development of non-fungible tokens (NFTs) has created a new market for cryptocurrency-based assets.
But don’t forget about good old Bitcoin. Bitcoin’s meteoric rise has been one of the most captivating stories in the financial world in recent years. Starting as a niche experiment, Bitcoin has grown into a global phenomenon with a market capitalization of over $300 billion. Though Bitcoin had a downfall in November 2021, it has made significant gains in recent months.
Ethereum is not far from Bitcoin as well. It has also experienced downfalls but is slowly gaining its strength back. Additionally, the upcoming Ethereum 2.0 upgrade is a positive factor for Ethereum too. Ethereum 2.0 is a major upgrade to the Ethereum network that will make it more scalable, secure, and sustainable.
Additionally, there are several factors that have contributed to the meteoric rise of cryptocurrency in recent years. Among them:
- the increasing availability of cryptocurrency exchanges and trading platforms;
- the growing number of businesses that accept cryptocurrency payments;
- the increasing use of cryptocurrency in cross-border payments.
In summary, the trends we’ve discussed show how much digital technology is changing our world. But it’s crucial to know that the cryptocurrency market isn’t without its problems, such as volatility, uncertainty and security concerns. Still, even with these challenges, many people are excited about investing in crypto.
So if you want to know more about cryptocurrency, how it is traded, and how to approach it, the welcome to YouHold, your ultimate guide in the stock trading world.