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EducationalJanuary 21, 2021

Decade In Focus: Top Trends That Will Drive The Crypto Trading & Adoption

Shubham Goyal
Chief Business Officer
January 21, 2021

“This is the beginning of the decade of Blockchain and I think in 2020, we’ll start to see the global recognition of crypto assets in the FS industry.”

~Antonio Senatore, EMEA Blockchain Lead

2020 has been a rollercoaster ride for the cryptocurrency markets worldwide. Another Bitcoin halving took place, the pandemic outbreak wrecked economies, and we had several political developments on the global scene. And of course, the mounting interest of fintech and state institutions in blockchain and cryptocurrencies.

A recent study by Deutsche Bank predicts a 4x growth in public cryptocurrency usage – with 200 million cryptocurrency users by 2030.

adoption of cryptocurrency

Since its inception, Bitcoin and other cryptocurrencies have gone through several developments. And each time, public interest in the idiosyncrasies of cryptocurrencies and blockchain technology has only risen further.

Can you guess what all possible trends could rule the coming decade? Let’s find out:

#1. The Rise of Crypto Derivatives trading

Cryptocurrency trading in India shot up by several notches since the time crypto trading became legal in India in March 2020 after the RBI’s crypto ban was lifted. Most of us are well versed in the nuances of crypto trading in India, but crypto derivatives is a much less popular trading option.

A crypto derivative is a class of financial contracts that derive their value from the performance of an underlying cryptocurrency or cryptoasset. Crypto futures, options, perpetual swaps and contracts for difference(CFD) are the prominent derivatives that the investors will be interested in the coming decade. Crypto Derivatives Exchanges like Delta currently facilitate trading in futures on various cryptocurrencies besides bitcoin futures that offer up to 100x leverage and have high liquidity and lower trading fees and intend to introduce other derivatives in the coming years.

#2. Diversification and Innovation

The crypto trading platforms are likely to diversify into several new functionalities, crypto options, bitcoin options and other ancillary services in the coming decade. For instance, an embedded fiat-to-crypto gateway, margin trading services, aggregator platforms for enhanced liquidity, over-the-counter trading for corporate clients, custodial services, ICOs and derivatives market could be the probable tools and facilities swarming the crypto space.

#3. DEX or Decentralized Exchanges

Decentralized exchanges are touted to be the future of crypto trading that promise investors of complete control over their Bitcoin and crypto-assets. However, centralized crypto and derivatives exchanges are still the norm, while decentralized exchanges exist in the minority due to the unavailability of technology advanced enough to support a DEX.

Both CeFi and DeFi exchanges have their own advantages, but almost all exchanges are exploring or want to explore decentralization in the near future.

#4. Security as the gamechanger

Studies suggest that the biggest threat to blockchain and crypto security would be posed by Quantum computing. The pseudo-random generation of crypto keys makes them susceptible to hacking, and quantum computing with its super-fast predictions and hashing logarithms can render the cryptocurrencies vulnerable. The next decade would see innovations in cryptocurrencies being shaped by quantum computing.

Crypto and crypto/derivatives trading platforms and payment systems will need to tackle such challenges with enhanced cybersecurity and crypto-custody services in place. Trading platforms like Delta provide enterprise-grade security and multi-signature wallets with withdrawals processed manually once a day to further secure the crypto trading API.

#5. Governance and regulations

Amidst all the crypto trading competition in India and worldwide, the need for regulations is being recognized more rapidly to weed out shady coins, fraud platforms and other such dupes. Government regulations will be the first step to lend credence to crypto trading markets in India and worldwide. This might prove to be the very step towards mass adoption of cryptos into the mainstream.

State needs to clarify their policy concerning taxation, trade, airdrops and staking in cryptocurrencies. A lot more clear guidance as to the role of financial institutions, AML procedures and the scope of the value, and the regulations in the buying, selling, and using of the coins is required too. The crypto exchange markets need to be regulated to earn the confidence of the investors and traders.

#6. Crypto purchases with Fiat money

The steady adoption of cryptocurrencies as investments, assets, and a medium of exchange( currently at a pretty nascent stage) would strengthen their credibility in the coming future. Buying of Bitcoin and other cryptocurrencies using Fiat will become a common phenomenon.

A chain of crypto ATMs might crop up in your neighborhood, and you may be able to use your crypto wallets just like a physical wallet. Governments are putting all their skepticism at work to impose restrictions on crypto trading and adoption( India can be the best-case scenario). In such cases, DeFi P2P exchanges might arrive as saviors offering their services via mobile mediums.

#7. Adoption by the Government and Other Institutions

It is expected that by the end of next decade, governments across the globe may either be planning or adopting their own cryptocurrency. China’s central bank recently announced that it would soon release its own digital coin. Countries like Dubai(emCash) and Venezuela(Petro) have formally declared their plan to launch their own cryptocurrencies. Many institutions are contemplating the feasibility of moving their operations over blockchain and issuing their own tokens.

You must have come across the term libra, the asset-backed stablecoin that Facebook announced earlier this year. It is expected to have a userbase of nearly 170 million in the US alone. No wonder we might hear about ‘national cryptos’ soon.

As the decade passes, we might witness the major crypto and derivatives exchanges worldwide operating more as an ecosystem, and consolidations might become a regular phenomenon such that only a few big names remain.

Moreover, we would continue to see evolution, diversification, and innovation in features, use cases and services at crypto and derivatives exchanges worldwide. There are obvious signs that the next decade would bring with it ‘a crypto spring’ with blockchain patents, well-funded projects and the crypto space becoming more mature.

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