04.03.202114:27 Forex Analysis & Reviews: Inflation protection or widespread use: main ways to use cryptocurrencies in 2021

Long-term review

Even though the cryptocurrency market is still storming under the influence of a price correction, clear prerequisites for rapid growth are already visible. First of all, this applies to high-profile announcements and technological solutions related to digital assets. Coins are slowly getting closer to stable positions, and market participants are preparing a soft cushion for them to make new historical records.

After a general market drop of 25% and the beginning of a protracted price adjustment, large companies have renewed their interest in cryptocurrencies. In late February and early March, large financial companies begin to actively introduce individual digital assets. Rakuten customers were allowed to make transactions with cryptocurrencies in a thousand stores across the country, and the American operator of cryptomats said that Dogecoin will soon appear in 45 US states.

As we can see, large companies prefer to expand the use of cryptocurrency, rather than a direct investment in specific coins. This may be due to several factors: first of all, according to recent research, including by Visa, more and more people are showing interest in digital coins and are willing to use them as a means of payment.

Exchange Rates 04.03.2021 analysis

Another important factor was the statement of the strategic department of JPMorgan that you can and should invest 1% of your investment portfolio in bitcoin. The advice from the bank's analytical department was also supported by Warren Buffett, who in his annual message to investors said that entrepreneurs should forget about bonds and focus on stocks and emerging financial instruments.

A positive trend in the expansion of demand for cryptocurrencies is also felt by the Bitfinex Pay crypto exchange, which allowed sellers to accept payments for services in Bitcoin, Ethereum, and other digital assets. Based on this, it can be argued that at the beginning of 2021, two more areas of operations with cryptocurrencies were formed: minimal investments to protect against inflationary losses, as well as the launch of operations with digital coins for clients of large financial companies. Also, the creation of their own NFTs is actively developing, which allows their creators to earn a solid profit, and give the cryptocurrency market a dose of recognition.

Based on the current trends, we can safely say that the cryptocurrency market has begun rapid assimilation with the usual financial activity of society at different stages and for different purposes. If the current trends continue to actively develop and take their unbreakable place in the niche of financial transactions, this can have a positive impact on the stability of the entire digital asset market. In the future, this process can neutralize the problem of cryptocurrency volatility and further expand its functionality.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Artem Petrenko,
Analytical expert
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