Bitcoin is taking over and has replaced gold as the inflation hedge for millennials. In 2022, Jeremy Siegel, Professor Emeritus of Finance at Wharton School, University of Pennsylvania, issued this news. Cryptocurrency is a digital currency that does not rely on a bank. Crypto is difficult to counterfeit. It can’t be controlled by a single government, bank or individual. Users themselves control the transactions. Cryptocurrency is seeing tremendous growth and offers a great way to diversify your portfolio.
CRYPTOCURRENCY IS SEEN AS VALID BY INSTITUTIONS
At the end of 2020, $15 billion on institutionally managed assets were allocated to crypto assets. Compare this to the end of 2019 when only $2 billion was invested. Insurance giant MassMutual has placed some of its cash reserves into bitcoin assets. Square and MicroStrategy also invested in crypto. PayPal and Venmo have enabled crypto trading. The Chicago Mercantile Exchange introduced the cryptosystem MicroEther in December of 2021. Wells Fargo recently published a special report titled “Understanding Cryptocurrency.” In it, they stated, “We believe that cryptocurrencies are viable investments today, even though they remain in the early stages of their investment evolution.” Clearly, big business is taking cryptocurrency seriously.
DECENTRALIZED FINANCE IS ATTENTION-GETTING
Decentralized Finance or DeFi, is a term for a variety of financial applications in cryptocurrency. It is a peer-to-peer network that avoids the need for third parties. The total value of cryptocurrency committed to DeFi grew from $15 billion in 2020 to over $100 billion currently. One top DeFi application is called yield farming. This involves lending crypto assets in return for interest or new cryptocurrencies. This is a method like digital banking. However, DeFi tends to yield higher interest rates than conventional banking. Decentralized Exchanges or DEXs allow crypto owners to transact directly without going through a banking exchange. Users have complete ownership and control of their crypto assets.
NON-FUNGIBLE TOKENS ARE EVERYTHING
Fungible tokens are items like bitcoins. They do not have to represent any claim to a thing or asset. Non-fungible tokens (NFTs) represent digital claims to a unique item or asset. These assets can be physical or digital. Items can be domain names, artwork, collectibles and more. The infamous Christie’s auction house has even gotten involved. In October of 2020, Christie’s auctioned off an NFT-linked physical portrait of Bitcoin code.
DECENTRALIZED APPLICATION EXPANDS ITS MARKET
Decentralized applications (DApps) are digital applications that run on a network of computers. They do not use only one. This makes them free from central authority interference and control. DAppRadar estimates that total DApp transactions increased to $271 billion in 2020. In 2019, this figure was only about $21 billion. There exist a variety of these apps with a multitude of uses. Apps like EOS allow businesses to build blockchain apps like web pages. The app Upland allows users to buy and sell virtual properties which are mapped to real-world addresses.
STABLECOINS ARE STILL POWERFUL
Stablecoins are a class of cryptocurrencies that attempt to give price stability. They are tied to a real asset such as gold. They offer the quick processing and privacy of crypto. Cryptocurrency such as Bitcoin values may fluctuate wildly. Stablecoins have greater stability. Tether is the most well-known Stablecoin with just over half the market. They have a value close to that of a U.S. dollar and are backed by dollar deposits. Today, Stablecoins have a total market value of over $157 billion.
CBDCs ALTER THE CRYPTO WORLD
Centralized Bank Digital Currencies (CBDCs) are digital currencies issued by a centralized bank. At least 80% of central banks around the world are exploring this form of crypto. Some centralized banks are already offering their own digital currency. CBDCs are backed by a government and controlled by a central bank. Cryptocurrencies tend to have their values fluctuate. CBDCs offer more value stability than other cryptos. The People’s Bank of China has committed itself to be a world leader in the adoption of cryptocurrency. It already has completed two CBDC pilot programs.
WHERE TO BEGIN
In “Understanding Cryptocurrency,” Wells Fargo stated, “We recommend professionally managed private placements for now, as the investment landscape is still maturing.” The Cryptosystem is growing and evolving. Begin your journey with a professional. One Blink Technology Group, LLC is a technology company that bridges the gap between technological advancement and human possibility. Here at One Blink, we have worked with many companies across the globe. Vanguard, AstraZeneca and Wells Fargo Center are just a few of the businesses that placed their trust in us. We invite you to place your trust in us also. Let us help you explore the cryptocurrency universe. Take your next step and contact us today. One Blink at 215-821-8181 or visit our website at https://oneblinktech.com/
