Regulators could bite off more than they can chew if they decide to overdo their hand on crypto regulation. Central banks will accidentally increase the value of cryptography in 2021 and Ethereum (ETH) will remain the platform to watch over the next year: the conclusions of a new one report from a US-based major crypto research firm Messari, looking forward to a new crypto boom when the new year begins.
The report, written by the company’s founder and CEO Ryan Selkis, claimed Messari identified “Top 10 Trends We Follow” as crypto prep for the most exciting and challenging year yet – a close one until 2020.
Here’s a quick look at those trends.
1. Keep an eye on the real and relative value
Selkis wrote that it helps to think about crypto in six categories: money (mostly proof-of-work currencies like Bitcoin (BTC)), tokens for smart contract platforms like Ethereum (ETH), crypto-dollars (stablecoins), DeFi -Token “cooperative” tokens, bound and synthetic assets as well as NF3 assets (Web3 / Non-Fungible Token). Within these categories, it is worth checking which token dominates and why. “And while most crypto-assets are correlated, over time we have seen a clear segregation of services between sectors and assets with real economy models,” the author said.
2. The value of BTC has risen – thanks to the central banks
Selkis said the real story for Bitcoin is that this year central banks put trillions of dollars on their balance sheets, monetized national debt to record levels, and amassed record levels of debt. If the Joe Biden administration manages to pass an unchecked stimulus package in early 2021, “more fuel” will be added to the “speculative fire over Bitcoin and other financial and hard assets”. If not, banks just keep printing money – and one way or another, Bitcoin seems to be the winner.
3. Ethereum is an “everything marketplace”
While Selkis thought that ETH isn’t even money in the report, he also writes that the “dynamism” of Ethereum is “undeniable” and is still the platform to watch in the New Year. He says, “It’s hard to ignore five-year-old technology that is processing real-world transfers of more than $ 1 trillion a year, a number that has already been dwarfed PayPal‘s. “
4. DeFi offers a vision of a bank-free future
The Messari chief said he was “not betting on regulators,” but claimed that DeFi was rightly being hyped. Only “regulatory action against top market projects” could hope to slow down this juggernaut that is currently building the blocks “required to power a fully decentralized and algorithmic financial system”.
5. The stage for stable coins is ready
Although Bitcoin will remain the most valuable digital currency even in the age of central bank digital currencies (CBDCs), this does not necessarily apply to Ethereum and its kind. So-called crypto-dollars on crypto and state platforms become platform tokens in just two or three Years overtake, wrote Selkis.
6. The crypto credit markets will boom
Retail-focused service providers “had all banner years” in 2020, and there could be more as the availability of “On-Chain Collateralized Credit” for both DeFi and centralized services could significantly reduce the pressure to sell in the next uptrend market, “said it Selkis stated, and it is likely that an imminent maturation of the crypto credit market will “make this the most liquid bull run yet.”
7. Synthetic finance will rule the waves
“Every single financial asset you can think of will one day be tied to crypto,” Selkis claimed, and there could be an argument to support those – like the Chinese government – who believe in the transformative power of blockchain , but don’t want to do anything with cryptoassets.
8. Crypto exchanges to fill your bill – or get bigger
Exchanges, Selkis said, are the £ 800 gorillas in crypto. “They make all the money, they touch all users and they have their fingers in everything,” he wrote. As such, they are now in the crosshairs of all market participants. But instead of “betting against them,” the CEO said he expected “they will become even more aggressive on inorganic expansion” as their income “spins beyond trading fees.”
9. NFTs are about to have their day
Selkis wrote that he is buying the theory that “almost every type of NFT built to date is likely to gain traction at some point” as these tokens are “the real critical building blocks of a more open Internet.”
10. Regulators can create a tough game if they’re not careful
As regulators in Washington and elsewhere become increasingly adamant in their approach to the crypto market, they run the risk of alienating the crypto community in that “some of us will start thinking about the ultimate exit: how to rebuild a crypto inspired nation-state. “
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