The current growth of the cryptocurrency market hasa qualitatively different nature compared to the digital asset boom in 2017. There are four main differences that have become the demarcation line between that period and the current rally.
Another audience of investors
If before 2018 they were mostly enthusiastsand miners, then with the release of bitcoin on the Chicago Mercantile Exchange (CME), digital assets attracted attention from traditional financial organizations and institutional investors, and this is already different money and completely different capitalization.
For example, Bitcoin capitalization in January 2017year was $ 15.5 billion, and at the beginning of 2020 it was already $ 131 billion, which is almost 10 times more. After breaking through the peak of 2017 in December last year, capitalization skyrocketed to values above $ 1 trillion. Thus, the cryptocurrency market is increasingly becoming a place for professional participants.
Suffice it to recall the $ 1.5 billion investment in Bitcoin from Tesla and more than $ 1 billion of MicroStrategy investment, which only spur interest in cryptocurrencies from large institutional players.
A radical change in attitudes towards cryptocurrency
Digital currency is no longer just an analogfiat or payment system with the ability to mine. Crypto-assets have become a well-established full-fledged system with a developed internal infrastructure of opportunities, as evidenced by the effectiveness of ICO, and then DeFi.
Development of external market infrastructure
This translates into transparency and securityservices, platforms, exchanges providing services for entering the cryptocurrency market. For example, CEX.IO operates in accordance with the requirements of the world's leading regulators and adheres to high standards of licensed activity, which is a guarantee of fulfillment of obligations, protection of funds and reliability of transactions.
Crisis resilience and flexibility
A good example in this case is the networkEtherium, which switched from PoW algorithm to PoS algorithm in order to optimize work and reduce fees. This adaptation of cryptocurrencies to an aggressive external and internal environment increases the level of confidence in the stability of the asset.
By 2021, the digital asset market will significantlytransformed. It has become more mature in terms of internal and external infrastructure, and the growth of trust in digital assets due to their exceptional resilience to crises has qualitatively changed the audience of investors.
Note that some market participants may haveassociate the current growth of digital assets exclusively with the super-soft policies of the world central banks and governments to support the global economy after the pandemic. We believe that this is just an additional bonus for cryptocurrencies, as well as for other assets.
The key growth driver in 2021, in our opinion, isis a qualitative change in the crypto market and perceptions about it, which ensured the outstripping pace of digital assets in comparison with fiat and traditional financial instruments.</p>