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Top 5 Trends Driving the Crypto Market Right Now

2020 was an interesting year for crypto. From the market crash in March to Bitcoin rebounding past $15k for the first time in two years, to DeFi exploding than ever before, this was not your average year for the industry. But beneath these events were unseen undercurrents that were driving everything. 

As you already know, the crypto market moves to its own beat. It all comes down to supply and demand – the causes notwithstanding. This is starkly different from traditional currency, whose value is set and controlled by central banks. Other factors are artificial actions such as the stimulus protocols being conducted across the globe right now to ameliorate the economic shock of the Covid pandemic. 


What’s the point? That the crypto market is interesting, and the events driving it one side or another are worth a closer look. A lot is happening behind the scenes: from a change in attitudes to stablecoins to new and bold crypto products. 

This article looks at the trends that are currently driving the crypto market and how. 

#1. Stablecoins

Stablecoins are a special kind of cryptocurrencies pegged to real-life assets, so they’re not subject to the wild volatility experienced by ‘normal’ cryptocurrencies. Stablecoins can be pegged to fiat, other cryptocurrencies, or exchange-traded commodities like aluminum or gold. The fact that they are attached to a fixed unit doesn’t mean that their prices never vary. Their market prices tend to fluctuate around their underlying assets. 

Stablecoins have the ability to bridge the gap between fiat and digital currencies. They provide the stability of fiat while maintaining the security of crypto. This year, stablecoins kicked off exceptionally well, recording a $90 billion transactional volume in a single financial quarter. 

As an investor, you can make money off stablecoins.  For instance, you can acquire a stablecoin for $1 and sell it on the market at a higher value of, let’s say, $1.0003. The extra amount might seem meager, but the amount of profit accrued becomes very substantial when you multiply this figure by thousands or millions. 


DeFi (decentralized finance) is, without question, one of the megatrends pushing the crypto space right now. DeFi is the idea that people can have complete financial autonomy. You know, without an interfering government or controlling bank. It’s a revolutionary idea that’s not just timely but liberating. Countless projects are now rushing to introduce new and interesting DeFi products. Things like yield farming, the latest DeFi craze, entered the crypto lexicon less than two years ago. 

The vast majority of DeFi projects are based on Ethereum. Ethereum pioneered smart contracts and decentralized applications (DApps) – which explains everything. The network’s market cap increased by 60% in Q3 2020. This growth percentage was seen by increasing market value from $25 billion to $40.5 billion by the end of September. The top 10 DeFi coins’ market capitalization by total value experienced a greater increase within the quarter. This was seen through the 345% increase (rise from $1.2 billion to $5.3 billion). The market capitalization of DeFi now accounts for roughly 12% of the blockchain’s total market value. As of now, DeFi is the driving narrative for the Ethereum ecosystem.

DeFi protocols such as Compound, Balancer, Curve, and other varied platforms are introducing new and exciting DeFi products. From staking to yield farming to borrowing, investors are rushing to DeFi to carve out financial value. 

#3. The Possibility Of A Cashless Society

One of the biggest upheavals to the world’s normal order in recent times was the Covid pandemic. In the blink of an eye, the pandemic had interrupted everything we hold dear – social life, economies, and yes – deeply held attitudes. Naturally, people began to rethink a lot of things. 

What previously seemed odd was now the norm. Working remotely? Check. Crypto payments? Check. Now, being forced to do things differently can sometimes be a good thing, which is the case with these scenarios. And it seems like these practices will remain even after Covid is long gone. It wouldn’t be an exaggeration to say that a cashless society is a possibility in the future. 

Meanwhile, the blockchain space is expanding quickly, as applications for interacting with crypto also advance. These days, you can easily buy crypto with just a credit card. This is a huge leap from the early days when you had to meet with a stranger to purchase crypto (and we all know that’s a risky proposition). Also, it’s not just the young and savvy population that’s embracing crypto. It’s institutional investors too. 

#4. Derivatives

Derivatives are another trend driving the crypto market. Bitcoin derivatives dominate the market at the moment, but Ethereum is catching up. This is a strong showing of Ethereum, and it hints at a derivatives economy buoyed by Ether and possibly other crypto’s derivatives. It also means both individuals and institutional investors are beginning to see Ethereum as a worthwhile investment and trading asset. Another thing – it shows that the crypto market is maturing. When other cryptocurrencies join Bitcoin in the derivatives club, it will be a diverse and more resilient market. 

#5. Cryptocurrency is becoming big

Crypto is probably enjoying its highest review ratings in years. Bitcoin, the pioneer of them all and the most successful one, is not viewed as a bubble anymore. And its market cap has exploded to eclipse that of superstar companies such as Coca-Cola and Intel. Also, crypto’s underlying tech – blockchain, is now being embraced by a multitude of industries. Like we’d mentioned earlier, institutional companies are getting involved in crypto more than ever before. 

Closing Thoughts

When we study the undercurrents of the crypto market more closely, it’s easier to tell which direction it’s veering to. And the current trends indicate nothing but good things for the future of crypto. Stablecoins are roaring, as is DeFi, and indications point to Bitcoin sharing the derivatives spotlight with other cryptos in the near future. In short: these are the trends driving the crypto market right now. 


By Edith M.

Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments.

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