A combination of the economic squeeze caused by the pandemic and the mainstream adoption of cryptocurrency has seen a significant increase in trading figures from the general public.
Comprehensive trading platform plus500 added crypto as an asset option without the need to use an e-wallet, which saw a 117% increase in users from 2019 to 2020.
Simplifying the process of buying and selling digital assets is a step in the right direction for trading in general.
There are still aspects of crypto trading that deter novices and even experienced traders from investing in cryptocurrencies—the likes of volatile markets and complex exchange platforms.
While this is true in some cases, from reading recent Binance reviews you can see that the move to provide a simplified platform (Binance Lite) has proven to be a fruitful investment for the crypto giants.
In North America alone, the projections about the value of the cryptocurrency market are astonishing, with the market valued at $754 million in 2019 rising to $1,758 billion in 2027.
While the figures are speculative, crypto’s pioneering leader Bitcoin reached a price of $24,000 in December 2000, an increase of 224% from the start of 2020. More recently, Bitcoin reached an all-time-high (ATH) of $64,805 in April of this year.
The concept of a decentralized finance (DeFi) has certainly played a big part in the vast swathe of public opinion believing that personal management of finances, indepentally of any central bank or established financial institution, is the way forward.
But, what’s interesting about the rise of crypto trading is something that extends beyond buying and selling digital currency. We’re seeing the birth of a new attitude towards trading and managing assets.
Trading Platforms Offer More than Just Cryptocurrency
Online trading isn’t a new concept. The ubiquity of cryptocurrency has just drawn the attention of the mainstream to the other opportunities out there.
Many of the trading platforms that are now offering cryptocurrencies are well-established, reliable, and have excellent usability. This isn’t to discredit cryptocurrency platforms, as some exchanges are still in the earlier stages of development and still provide a first-rate service to users across the globe.
However, there are exchanges that offer a more complete service; Skilling offers crypto, forex, shares, indices, and commodities trading. This kind of complete package is attracting a lot of attention from new traders, who are looking beyond cryptocurrency markets.
Once new traders have bought and sold their first few assets, they realise that the process isn’t too complicated. Selling commodities like gold and crude oil may once have seemed totally inconceivable.
But, with modern trading apps and desktop platforms, it’s become a reality for many amateur investors.
Those that are drawn to crypto trading, have done so as a result of curiosity and an interest in making money. That same curiosity is drawing many people to invest in other assets.
In 2021, we’ve seen a significant increase in retail trading, almost as much as mutual funds and hedge funds combined. Retail trading refers to the process of buying and selling securities for personal accounts, a form of amatuer trading if you will.
Amatuering trading is transforming markets, with platforms like Robinhood garnering a huge amount of media attention and opening the door for many to retail trading.
The Normalisation of Crypto as an Asset Class
The interest in retail trading has helped to give rise to the number of trading platforms offering cryptocurrency, with many trading platforms recognising the potential of crypto as an asset.
Although it’s great to have options, many traders are focused on crypto trading and know exactly what they want.
Many are speculating that digital currency is edging closer to traditional finance. The technology that underpins cryptocurrency is still new and there are still many hurdles to overcome.
This makes it difficult to say, with conviction, that crypto has reached the point of asset class status. One can expect the crypto landscape to change a lot in the coming years, with certain coins rising and falling as times goes by.
Industry leader Bitcoin is the one that many expect to establish itself as the stable coin in the long run.
However, the volatility of the market still raises questions, regardless of the fact it has the 10th highest market cap of any asset in the world at $637,60 billion as of June 2020.
The normalisation of crypto through trading platforms listing the various major coins isn’t the only thing that has helped the process.
In 2021, we’ve seen major companies like Tesla and Microsoft offering payment via Bitcoin, as well as major financial companies like BNY Mellon and VISA joining the crypto space.
Several established financial firms have launched crypto products, including Fidelity Investments which announced they would provide a crypto trading platform as part of their services.
Cryptocurrencies have reached a point where many investors aren’t focused on what the price is today, rather than on what the investment could offer in the long term.
This is an entirely different position to where the cryptocurrency industry was some years ago.
Cryptocurrencies are building an infrastructure for the future, developing projects that users can believe in and offering systems that will positively impact the current financial structure.
What’s next for crypto?
Eventually, the crypto hype will begin to fade, at which point crypto enthusiasts will look to coins and projects that offer genuine projects with real impact.
Blockchain technology has the power to change and this is something fintech companies are beginning to utilize.
There are many companies that are already using blockchain technology to underpin the development of products and services, solving complex issues.
Finance will be the focus, but blockchain certainly has the capability to stretch beyond fintech.
One question many have regarding DeFi technology is whether or not it can be sustained as the technology aims to move into the centralized world of finance.
While decentralized finance was the dream, it may not end up being the reality.
The technology that has been developed as a result of blockchain cannot be underplayed. Finance has become more accessible, cheaper, faster, fintech as a whole has revolutionised banking and now with the introduction of blockchain, things are looking ever better.
Nowadays, people are focused on user experience, as well as the quality of service. The ability to perform transactions, trades, and solve issues with the click of a button have become a focal point of finance.
There is a wealth of exchanges and money management tools available to users, with many gravitating towards these thriving businesses.
If you look at the underlying metrics you can see the number of unique visitors and addresses being created by DeFi protocols are picking up, regardless of the fact markets are down.
The short term of crypto may be worrisome for investors and newcomers, but Medium-term, long-term, this is a trillion dollar industry. This is a marathon, not a sprint.