For the crypto industry, 2019 was a rollercoaster ride with new highs and new lows. The industry is in the midst of major transformation and a handful of top trends are leading this change.
So far in this series, we’ve looked at various trends that have started to rear their head in 2020. In this final instalment, we turn our attention to cryptocurrency in retail as well as decentralized finance projects, and what these two new avenues mean for the future of the market.
Retail Adoption on The Rise
For most of its history, crypto has actually been treated as a financial commodity and less like a medium of exchange or an alternative to fiat money. Consequently, it may surprise some that major companies like Overstock.com, Newegg, Microsoft, PayPal, and Shopify all accept cryptocurrencies. Overstock, in particular, accepts over 40 altcoins and was the first company to boast crypto as a mode of payment.
In 2017, 370,000 vendors across 182 countries accepted Bitcoin, a sharp increase of 30% over the previous year. Thanks to continued innovation, popularity, and worldwide availability, cryptocurrency is becoming a great option for companies looking to expand their reach and eliminate intermediaries.
Here are some other benefits that retailers can expect by accepting payments in cryptocurrencies:
- Lack of Fraudulent Chargebacks
One of the biggest threats retailers face from buyers is the constant risk of fraudulent chargebacks issued by bank-based credit card payment systems. Although retailers can fight them, the process is long and can take a toll on small businesses. This risk is completely gone with cryptocurrencies because transactions are irreversible. - Lower Transactions Fees
Transaction fees tend to quickly rack up. High-volume retailers will save significant sums of money instantly by switching over to cryptocurrencies and their lower transaction fees. - Easier International Transactions
Cryptocurrency is not only a safer alternative to international transactions but also an easier alternative because retailers can avoid exchange fees.
2020: The Year of DeFi
In many ways, cryptocurrency moved to its decentralized roots with the rise of decentralized exchanges and a movement known as DeFi or Decentralized Finance. DeFi is a form of finance running on trustless protocols and without intermediaries. The first wave of DeFi applications came with the launch of Bitcoin and now the second wave of DeFi applications is here, enabled by Ethereum.
DeFi contracts have been a significant driver of Ethereum’s growth in recent years. In fact, in 2020, the value locked in DeFi protocols reached $921 million USD — a major milestone. To put this growth into perspective, the total value locked in DeFi contracts was $600 million in the middle of December, last year — making it a 53% increase in the span of just two months. Experts believe that DeFi contracts will very soon break the $1 billion USD mark, attracting a new wave of investments.
DeFi has become a hotbed of innovation and a lot of game-changing new technologies have emerged within the last few years. Take, for instance, the emergence of Dai Savings Rate (DSR). The key aspect of DeFi revolves around lending and borrowing. For a long time, the need for lending and borrowing was solved through collateralized speculation with platforms like MakerDAO, Compound, and Fulcrum. However, a recent upgrade to MakerDAO allows users to earn interest on their Dai stored in the Maker protocol. This upgrade is important because it can be integrated into any crypto exchange and could very well dictate the direction in which the base interest rate for the crypto DeFi space goes.
There are a few other innovations whose effects we’ll see in 2020 including interoperability across platforms, non-custodial and decentralized exchanges, DeFi insurance, and ID verification tools (KYC) based on blockchain technology.
Innovations like these are part and parcel of thousands of investment opportunities that arise every year in the form of market trends. However, both institutional and retail investors are not able to reap the benefits of these opportunities because of noisy data and lack of predictive insights.
Alluva allays this problem by providing both institutional and retail investors access to real-time market trends. Alluva aims to become the world’s largest analyst platform and predictive insights provider that allows analysts and individual investors to predict the price of various cryptocurrencies for free. Accurate predictions are rewarded in the form of Alluva tokens, while institutional investors receive the predictive insights they require to take the right investment calls.
Wrapping Up: What 2020 Has in Store
Over the course of these four articles, we’ve discussed seven major trends to watch out for in 2020. To condense the effects of these seven trends into one final outcome, let’s just say that crypto in 2020 will be more accessible and integrated into daily lives of not just investors, analysts, and enthusiasts, but also end consumers.
In 2020, governments across the world are not only supporting cryptocurrencies but also actively participating in the technology’s development. This fact, combined with the greater acceptance by retailers, consumers, and institutional investors, means that 2020 is going to be a transformative year for the crypto world.
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