Looking at both the long-term and short-term history has many looking towards a bright future in bitcoin.
Confident and seasoned traders are reaching for their sunglasses as the future of bitcoin and other cryptocurrencies looks bright. Markets haven’t made the large push past the $12,500 mark, but traders remain confident as other markets pull back from recent bubbles. DeFi captures the interest of new investors, and platforms like Bitvavo are seeing a renewed interest with novice traders. Particularly as confidence in legacy markets falters and the cryptosphere naïve are looking for all the help they can get to get into the newfound stability that crypto represents.
Continued adoption shows liquidity is down as BTC is snapped up and locked into DeFi markets. Newer tokens take a front seat as yield farming booms and the current market close streak has many thinking of the 2017 boom. But what can this year’s performance and that of years past hope tell us about bitcoin’s future? Quite a lot.
Records in the Making
In 2020, possibly the worst year on the books in a number of ways, has seen bitcoin outperforming some of the biggest of all legacy assets, as the coin has seen an impressive 50% YTD gain. With that being said, few major market moves have been made since July, as the coin continues to hover between $10,000 and $12,000. Giving it an edge of stability not seen in legacy markets. Despite the quiet and steadfast pricing, most crypto investors still hold firmly to a bullish outlook on the coin’s ability to continue to push forward.
The coin has been on a solid 66-day streak, routinely closing above $10,000 since August. Which sees the market volatility down 41%, a stark departure from what most seasoned bitcoin investors are used to. Despite the coin not seeing record highs, the last time stable prices were seen for such a long period was just before the massive breakout in late 2017, where bitcoin prices soared near $20,000 per BTC. Which leaves many speculators positive.
Rising Drive for DeFi
Cryptocurrencies locked in DeFi, or decentralized finances, structures moved passed $11 billion on Tuesday, suggesting continued interest in exploring alternate markets. Which spells good tidings for continued adoption. DeFi essentially functions as an alternative to traditional banking institutions and the infrastructure they represent, where investors can use decentralized currencies like bitcoin and ethereum in order to participate in these structures. Creating a financial system that closely mirrors the one we’re used to, without the need for a centralized bank, or any of the trouble that comes with them.
DeFi adoption continues to hold strong even as cryptomarkets correct. Locking up a ton of liquidity, but also creating a path for HODLers to create gains on bitcoin sat in wallets. Instead of relying on the intense volatility of the coin, investors can put their coins to work through borrowing or investing in decentralized business. Which has become an incredibly enticing reason for many to continue investing and building wallet stores. Also creating a market for “yield farming” in which lent or borrowed bitcoin can be used to create capital in other digital tokens- something that is quickly becoming a multi-million-dollar market and keeping seasoned investors interested in the market itself.
As bitcoin and other cryptocurrencies continue to build familiar infrastructure, we’re seeing more market stability, and more traditional traders buying into the market. As sentiments regarding fiat remain skeptical at best, many long-term traders are turning to bitcoin and finding a burgeoning confidence in the alternatives that bitcoin and other cryptos bring to the table. This is another reason that despite the echoes of 2017 that are felt by some, many believe these price foundations are built on more solid ground.
As more investors, both new and old, find a comfortable niche within crypto, relying both on old trading habits and new market behaviors, it’s unlikely to see a massive correction like the one of 2017. The subsequent bear market of 2018 was filled with an overly aggressive altcoin season, as new investors clamored to buy ICOs that offered little more than a poorly written white paper. The likelihood of a similar recurrence is low, as we’ve learned our lessons and most bitcoin is being locked up in stronger business. Creating a more stable market for all.