When asked what DeFi (decentralised finance) tokens they owned, survey respondents listed uniswap (UNI), chainlink (LINK), yearn.finance (YFI), kava.io (KAVA) and kyber network (KNC). Two of the big altcoins to emerge in 2020 were polkadot and chainlink, both which have vast community and developer support with ever-expanding partnerships to create new use cases because of their technology.
Crypto Investment
Crypto investment decisions are decided by influencers and experts (14%), project content (13%), news publications (13%), onchain data (when transactions are verified on the blockchain) and activity (12%), and Twitter (12%). Technical analysis makes up about 32% of trading decisions, fundamentals 16% and market sentiment 13%.
An integral factor driving crypto prices may be the state of the global economy: “Following March 12th’s infamous ‘Black Thursday’, mounting concerns over monetary and fiscal policy and economic growth when confronted with the Covid-19 outbreak has taken fear back to global financial markets,” states the survey report. “For example, in-may 2020, billionaire investor Paul Tudor Jones stated he was buying contact with bitcoin as a hedge against inflation he sees via central bank money printing. “The marketplace has seen multiple instances where bitcoin exhibits a solid, positive correlation with traditional financial assets – such as for example gold and the S&P 500.
Furthermore, bitcoin’s ever-growing acceptance and recognition by institutional investors in the original financial realm has roped bitcoin into discussions surrounding inflation, asset allocation, and portfolio management. “In August 2020, George Ball, former CEO of Prudential Securities and current CEO of Sanders Morris Harris, suggested bitcoin or other cryptocurrencies is actually a ‘safe haven’.” Among the big trends of 2020 was the growth of decentralised, instead of centralised, exchanges.
Centralised Exchanges
These are owned by shareholders and typically follow local rules and regulations. You’re generally necessary to make deposits to get crypto assets on these exchanges, while decentralised exchanges haven’t any single point of control, , nor require users to provide private information or go through Know Your Customer routines. All transactions are handled by computerised ‘smart’ contracts.
Privacy is sacrosanct in these decentalised exchanges, and transactions are handled peer-to-peer, minus the intervention of a central control authority as in centralised exchanges. In the beginning of 2020, the full total value locked (TVL) in DeFi applications was $700 million but exploded to $14 billion by November, as ‘yield farming’ along with other money-making opportunities were developed. DeFi allows crypto participants to lend or borrow in so-called DeFi liquidity pools, and the rate of participation in this activity is rapidly growing among crypto owners. The full total market cap of most stablecoins stood at nearly $24 billion in November, up 360% from the $4.8 billion in the beginning of the year. Almost 25 % of respondents believe the surge could be explained by way of a flight to safety and demand for stability, especially following the outbreak of Covid-19.
Decentralised Finance
Another big trend in 2020 was the rise of decentralised finance (DeFi) and stablecoins, which are backed by fiat currencies like the rand and US dollar. Stablecoins like xZAR are backed 1:1 by rands, or regarding Tether, 1:1 with the united states dollar, and can be utilized to make payments without going right through a bank. Read: Crypto pioneer buys a R600k home with crypto and it eventually ends up costing R200k