There has been a surge in institutional investment in digital assets in 2021. There is a trend of firms and celebrities making headlines about adding bitcoin to their portfolio. Rather than being viewed just as a short-term speculative move, companies are increasingly seeing crypto as a store of wealth and a means of diversifying their portfolio in a constantly fluctuating market. With the practical and strategic benefits of crypto, companies and various countries are now understanding the importance of having a digital asset portfolio.
Crypto Adoption is on the Rise
Cryptocurrencies are becoming increasingly popular. According to Chainalysis, crypto use has increased more than 880% in 2021, and the numbers are rising gradually. It all started with El Salvador becoming the first government to recognize Bitcoin as legal tender, allowing it to be used in any transaction, from purchasing a cup of coffee to paying taxes.
Even El Salvador’s President Nayib Bukele has been at the forefront constantly supporting the digital currency’s adoption, and this move to legalize bitcoin has proved to be a game-changer for crypto in terms of mass adoption. Moreover, in a recent move, Ukraine’s parliament has approved modifications to its statute “On Virtual Assets”, paving the way for the eventual establishment of a regulated market for cryptocurrencies.
The new law aims to provide additional benefits for Ukraine’s commercial development where foreign and Ukrainian crypto firms will be allowed to operate lawfully, and Ukrainians will have easy and safe access to the global virtual asset market. Furthermore, the former California state legislator wants to make Bitcoin legal money in his state. The announcement comes after an Arizona state senator submitted legislation to exclude Bitcoin and cryptocurrency from property taxes in her jurisdiction.
All of this suggests that widespread acceptance of cryptocurrency is already underway. With more governments, nations, and large organizations joining the fray, it is evident that crypto is here to stay, and it will undoubtedly have a huge influence on the crypto markets as a result.
Mainstream Adoption is Driving the Crypto Markets
The year 2021 is remembered as a watershed moment for cryptocurrencies. The decade-old technology piqued the interest of investors and regulators alike, and it eventually made its way into the mainstream. According to crypto.com, the number of individuals holding crypto in the world has more than quadrupled to almost 220 million. Moreover, investors invested $30 billion into crypto projects in 2021, which is more than what was seen in the preceding five years combined. From digital collectibles to cryptocurrency games, the industry attracted billions of dollars in investment.
This positive change was also seen in DeFi protocols and platforms as the total amount of money on DeFi platforms, known as total value locked (TVL), increased to $259 billion from a mere $19 billion at the start of the year. Even altcoins became a significant competitor to bitcoin. Many crypto’s including Ethereum, Solana, and Luna, saw great progress in terms of adoption and usage. Even NFT markets skyrocketed, driving sales totaling nearly $24.9 billion.
This tremendous growth of digital assets as a result of mainstream adoption has given rise to people growing their portfolios in order to avoid missing out on the crypto revolution. Fintechs like Baanx are already creating the infrastructure that would bring digital asset friendly, high quality, and secure B2B2C services to the industry, enabling customers to transfer money globally, instantly and for free. Partnerships between mainstream fintechs like Baanx with one of the largest blockchains such as Tezos is further evidence of how technology is moving to integrate with crypto. Moreover, Baanx is offering unique features such as one that allows users to get secure, interest-free stablecoin payouts based on their crypto holdings with up to 50% LTV instantly on BTC or ETH holdings. Such services are already becoming popular through the crypto industry, further incentivizing users to build a digital asset portfolio and leverage it for different use cases.
Building a Digital Asset Portfolio is the Way to Go
The digital asset revolution will continue, and with so many new breakthroughs in this space, it is worthwhile for folks to create their own diversified digital asset portfolio. With the Web 3 revolution in full swing and established firms like Baanx pushing innovation in this space, it has now become a question of “when” rather than “if”. Now is the ideal moment to begin building a portfolio of digital assets, and diversifying into other industries such as NFTs, DeFi, and metaverse will undoubtedly have a significant influence on the growth of your portfolio and possibly be one of the most desired investment portfolios soon.
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