These 3 Trends Are Driving Crypto Market Growth Now.

In such a fast-growing industry as crypto asset markets, it can be overwhelming to try to extract the main themes driving liquidity and investor interest. Yet, doing so helps to understand how relatively new markets evolve, and what the catalysts will be for the next big steps forward.

Stablecoins

It is a common misconception that fiat-based stablecoin prices never vary relative to the underlying currency (usually the dollar). This is not true. They are pegged to a fixed unit, but in reality their market prices fluctuate around that level.

This allows for arbitrage opportunities in which investors can mint a stablecoin for $1 and sell it on the market for $1.0003, for example. Multiplied by millions, this can generate a handsome profit. Selling pressure will bring the stablecoin value down towards its pegged price.

Over Q3, the supply of USDC, the second-largest stablecoin by market cap, grew much more than that of tether (USDT), the largest stablecoin, even though the arbitrage opportunities (as measured by the standard deviation of the stablecoin prices) were greater with USDT. This hints at a growing demand for USDC from

institutional investors and traders: USDC is run by licensed, U.S.-based firms and has taken a more regulatory-friendly approach.

DeFi

The market capitalization of the top 10 DeFi coins by total value locked saw an even greater increase over the quarter, growing over 345% from $1.2 billion to $5.3 billion. Aggregated as one, the market capitalization of DeFi nows makes up roughly 12% of total market value on the blockchain, and has emerged as the driving narrative for the Ethereum ecosystem.

Ethereum emerged in 2014 with the aim of being the “world’s computer.” In the ICO boom of 2017, it became the “fundraising platform of the future.” Now, the role of Ethereum in the evolution of decentralized finance is yet again changing the blockchain’s narrative. This could impact not only the levels of interest from both retail and institutional investors; it could also influence technological considerations, especially at a time when the underlying technology is undergoing a profound transformation as the ecosystem migrates to Ethereum 2.0.

Platform for listing & IEO Lanchpad

Against the background of the fall in the ICO market, the volume of projects on Lanchpad platforms of various crypto exchanges increased by almost 218%.

Experts attribute this interest of users to this tool, firstly due to the high marginality, and secondly to the reliability of the submitted projects.

Perhaps today, the Lanchpad platform for listing and IEO is a real working tool that connects users, investors and promising crypto projects.

Derivatives

While the ether futures market is still a fraction of that of bitcoin, it is starting to exhibit some catch-up activity.

This shows the strong growth in the Ethereum ecosystem and hints at growing institutional acceptance of ether as an investment and trading asset. It also highlights the evolution of crypto markets as a whole — a pre-requisite for a mature market is a lively derivatives market. So far, the derivatives market has been dominated by bitcoin futures. Greater diversity will lead to a healthier market overall.

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Blockchain projects, promotion and development. Open source intelligence (OSINT). Non-standard tasks, with non-standard execution.

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Andrey Plat

Blockchain projects, promotion and development. Open source intelligence (OSINT). Non-standard tasks, with non-standard execution.