The main differences between the current growth of the crypto market and the boom of 2017

The current growth of the cryptocurrency market is of a qualitatively different nature compared to  the boom of digital assets 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 it was mainly enthusiasts and miners, then with the entry of bitcoin on the Chicago Mercantile Exchange (CME), digital assets have attracted the attention of traditional financial institutions and institutional investors, and this is already a different kind of money and completely differentcapitalization.

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 analogue of fiat or a payment system with the ability to mine.Crypto assets have become an established full-fledged system with a developed internal infrastructure of capabilities, as evidenced bythe efficiency of ICOs and then DeFi. 

Development of external market infrastructure

This is expressed in the transparency and security of services, platforms, and exchanges that provide 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 activities, which is a guarantee of compliance with obligations, protection of funds and reliability of transactions. 

Crisis resilience and flexibility

A good example in this case is the Ethereum network, which switched from the PoW algorithm to the PoS algorithm in order to optimize operation and reduce fees.Such adaptation of cryptocurrencies to an aggressive external and internal environment increasesthe level of confidence in the stability of the asset. 

Summary

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.

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