bitcoin: Moving beyond Bitcoin to the next crypto revolution in 2021

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DeFi

As the name suggests, Decentralised Finance (Defi) is a diverse group of financial applications founded on cryptocurrency or blockchain technology. As an open financial system, Defi aims to improve financial transactions' speed and efficiency by eliminating the middlemen and delays due to a centralised system. Defi offers its users direct control over their money. It is being used in various fields like banking, insurance etc., across the globe.

NFT

Non Fungible Tokens are digital assets with a presence only on the internet. They represent various tangible and intangible assets such as art, paintings, sports cards, music data, virtual real estate etc. Each NFT contains unique information which helps users distinguish between different NFT’s. The data also allows us to verify the authenticity of the assets. Since each NFT is special on its own, they are non-exchangeable.

Polka Dot

Polka Dot connects multiple specialised blockchains into a unified network. It is also known as the next-generation blockchain technology. In general, a blockchain can process only a limited number of transactions at a given time. But Polka Dot could process multiple transactions on multiple chains parallelly. Bringing several blockchain networks together into a scalable network enables blockchain to reach its full potential for practical applications.

Yield Farming

It forms part of the Defi network and allows users to earn cryptocurrency using cryptocurrency. Its process is similar to lending money to your peers and earning interest over the loaned amount. Yield farming requires its users to lock in their crypto assets for a specified period in return for rewards. Rewards could be earned in the form of interest, new tokens, other crypto coins etc. The fundamental advantage of yield farming is the lucrative profit-making opportunity involved.

The dramatic rise in Bitcoin value has put cryptocurrency on the map in the investment space. Since its inception - not over a decade ago, Bitcoin has surpassed great heights in terms of value. It is the biggest cryptocurrency with a $1 trillion economy. While Bitcoin is the largest cryptocurrency, there are over 5000+ cryptocurrencies currently in circulation, many of which are listed on the CoinSwitch Kuber app. However, most people are unaware of these currencies.Several digital currencies have posted gaudier returns than Bitcoin. Ethereum - the second-largest cryptocurrency, has risen by 750% since 2020, besting Bitcoin’s 600% returns during the same period. Many such cryptocurrencies are now sharing the spotlight alongside bitcoin. Investors are starting to wonder, ‘What is the next crypto revolution in 2021?‘Cryptocurrencies are the newest class of assets introduced into the investment landscape. Although it was initially designed as a decentralised alternative to the traditional and centralised financial system, it has also evolved to become a store of value.While there was some older form of digital currencies since the 1980s, people recognised cryptocurrencies through the lens of Bitcoin. Bitcoin was published as a whitepaper by an anonymous person/organisation under Satoshi Nakamoto’s pseudonym in 2009. Its concept quickly rose in popularity and gained attention on a global scale.Eventually, many Bitcoin-like currencies collectively known as altcoins mushroomed in the crypto market. While not all of those currencies bear high utility, many of them have proven to be an improvement over Bitcoin itself. Here’s a list of the most popular coins currently in circulation.Bitcoin has now clearly established itself as a valuable asset. Investors are increasingly on the lookout for something more significant than Bitcoin. While it is common to consider the value and market trends to guess which is the next big crypto, price is not the only aspect we need to focus on. Instead, investors need to look for functionality and supply of the digital currency. If a cryptocurrency is useful, it will surpass any hindrance, survive and continue to grow.Another factor to look for is scarcity and supply. If a currency is not limited in supply, it may lose its value over time since reserve can be met with increasing demand and cause inflation. For example, Bitcoin gained popularity because it removes intermediaries from transactions and serves as a deflationary asset with a limited supply of only 21 million BTC in total.A cryptocurrency will have the highest chance of becoming the next crypto revolution if it has the following characteristics:The cryptocurrency market is a melting pot of groundbreaking innovations in technology. Many cryptocurrencies with high utility and functionality are being introduced from time to time. Here are a few trends that could revolutionise the crypto space in 2021.The cryptocurrency market is ever-changing. With cryptocurrency apps like Coinswitch Kuber making significant headway into easing crypto investment, there are innumerable opportunities for crypto investors in India to build a strong portfolio.However, before making a significant investment decision, investors should keep in mind to question the functionality of the currency. If a cryptocurrency is functional enough, it will continue to thrive.This above is non-editorial content, and TIL hereby disclaims any and all warranties, express or implied, relating to the same. TIL does not guarantee, vouch for or necessarily endorse any of the above content, nor is responsible for them in any manner whatsoever. The article does not constitute investment advice. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified.

Bitcoin tops $59,000 as PayPal launches crypto checkout service

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Bitcoin price continued to rise on Tuesday and topped the $59,000 level for the first time since 21 March after PayPal said it is allowing US consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally.

PayPal’s announcement came a day after the US-based digital payments major Visa said that it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network. The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged to the US dollar.

“PayPal launching a crypto checkout service is a bold step towards making cryptocurrencies mainstream, globally. The move will significantly bolster crypto’s adoption in day-to-day life," said Ashish Singhal, Co-founder and CEO, CoinSwitch Kuber.

Meanwhile, the crypto market also remained unaffected by the overall bearish tone in the global markets after a fresh rise in US bond yields.

At 7.30pm IST, bitcoin was trading at $59,010.84, up 1.6% after moving in a wide of $57,112.54-59,658.83 over the past 24 hours, as per CoinGecko. The digital asset is now just 4% away from its lifetime high of $61,711.87.

Meanwhile, other major cryptocurrencies such as ethereum, cardano and ripple were trading up to 3% in the green.

The world’s second-biggest cryptocurrency, ethereum, was trading at $1,832.37, up 2.9% and was around 10% away from its all-time high of $2,042.93.

The last week was an interesting one for the crypto industry where prices saw a very steady increase in prices during the first half of the week followed by a decline during the second half.

“Given that we are in the last week of the financial year, there also are trades in India related to profit or loss booking. The speculation of how the Indian regulators would handle the crypto industry is having a lesser impact on Indian crypto prices nowadays and it is very well matching with international prices, which is a healthy market sign," said Sathvik Vishwanath, co-founder and CEO, Unocoin.

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Bitcoin’s meteoric rise has boosted crypto hedge funds Dado Ruvic/Reuters

Cryptocurrency M&A is expected to have a stellar 2021, according to PwC, after the value of M&A deals in the space doubled year over year in 2020.

The firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million in 2020.

PwC outlined the three trends to expect in the crypto space in 2021.

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Mergers and acquisitions will be a big theme in the cryptocurrency space, according to PwC, after the value of M&A deals in the sector doubled year over year in 2020.

In a report published on Monday, the Big Four accounting firm revealed that the average M&A deal size jumped by 174% from $19.2 million to $52.7 million, with four deals valued at more than $100 million in 2020. The firm also revealed that transactions are shifting away from the Americas, with 60% occurring in Asia and Europe compared to 2019.

Transactions, according to PwC, are also more spread out across categories.

“With increasing interest in crypto from retail and institutional investors following the positive market momentum, it is not surprising to see increase M&A in the broader train sector,” the report said.

The report comes amid a rapid rise of interest in the cryptocurrency space, with bitcoin, the most popular digital asset, rising 600% in the past year alone. While many bitcoin bears continue to criticize cryptocurrencies, many advocates are expecting the boom to continue amid rising interest from both retail buyers and institutions.

The UK-based firm, in the report, then outlined the three trends to expect in the M&A activity in the crypto space across the globe after a record-breaking 2020.

Crypto M&A will be be driven by large players

PwC said it expects to see further consolidation in the industry with larger, well-funded, and profitable firms seeking to continue their M&A activities. “We expect the focus to be not on the acquisition of smaller competitors but rather of firms that offer ancillary services to their current offering,” the report said, referring to crypto media, data, and compliance research.

Institutionalization of the crypto industry will continue

The firm said it predicts a steady continuation of institutionalization of cryptocurrencies, driven by the rally in the price of the digital tokens as well as heightened media attention on central bank digital currency (CBDC), stablecoins, decentralized finance (DeFi), and non-fungible tokens (NFTs). PwC said all these will serve as catalysts to more institutions wanting to enter the space through investing or acquiring.

M&A, as well as fundraising, will increase

Based on the bull market in the first quarter of 2021, PwC said it expects the number and value of M&A deals to increase this year. It also said it sees more activity comeing from Asia-Pacific and EMEA reagions.