These are important milestone days for the crypto world in early 2021. The entire cryptocurrency market has hit $ 1 trillion for the first time in its history, setting a record that will be only the first in a long list. The DeFi market, on the other hand, reached 20 billion stuck internally, proving to be one of the most expanding sectors of the last year.
Crypto hitting 1 trillion, Bitcoin at 65% of dominance
As for the global cryptocurrency market, the trend seems well defined for 2021 in which many surprises await us. The dominance of Bitcoin in the entire market continues to remain stable between 60–70% of the total capitalization, undoubtedly proving to be the most constant coin in its development process. Obviously, the Dominance does not define the market but it gives us some interesting indications on how it is moving. First of all, Bitcoin remains the driver of the crypto world, being the first coin with which one interacts as a novice and the only one strongly desired by the institutional world for now.
Ethereum is and remains the Altcoin par excellence despite several contenders such as EOS, Algorand, Tron and many others have appeared over the years. ETH consolidated its position by taking a market share of around 15%. The ETH2.0 project and the world of DeFi have pushed again the cryptocurrency above $ 1000 and ever closer to the ATH. The rest of the market remains very fragmented: no other coin has gained ground compared to others despite projects like Polkadot, Chainlink and Cosmos have many possibilities on the cards.
The sector of 2020: DeFi hitting 20 billion
Since the beginning of 2020, a sector in the world of cryptocurrencies is booming, namely that of DeFi. Initially seen as the “new ICOs of 2020”, this sector has made room for itself in the portfolios of many investors and Blockchain enthusiasts for the use of protocols ready to revolutionize traditional finance. It should be emphasized that as cryptocurrencies are still in the early stages, DeFi is just born but is already doing great things.
It is not easy to find a flagship project for the DeFi world as there are constantly many protocols in the top 3. Undoubtedly some of these have always remained in the top 10 and have proved to be very interesting projects in the future.
As for the Lending platforms, we find Maker (with about 4.1 billion USD blocked in Smart Contracts), Aave (2.7 billion) and Compound (2.5 billion). As for the DEXs, we find Uniswap (2.7 billion), Curve Finance (1.9 billion), SushiSwap (1.7 billion) and Balancer (800 million). In addition to these projects, the growth of Synthetix and the interest that is developing in protocols capable of managing derivatives above the Ethereum Blockchain should also be emphasized.
In short, 2021 undoubtedly seems to be the year of cryptocurrencies given the global economic situation. Bitcoin, from a financial point of view, and Ethereum, for Smart Contracts and the surrounding ecosystem, are the two most popular protocols to consolidate the already very high dominance in the market. As previously mentioned, there are certainly other projects to consider, but in the world of cryptocurrencies, one of the fundamental things to never forget is that the network effect matters a lot, for any coin.