Crypto’s Last Week
This edition of “Crypto’s Last Week” accounts for the most notable, and crypto-related — institutional, investment, or regulatory — news published between Saturday, January 09, 2021, and Friday, January 15, 2021.
After a very successful 2020 for the Decentralized Finance (DeFI) with massive amounts of capital entering the space in search for decentralized exchanges (DEX), P2P lending, derivatives, and payment platforms among others, 2021 seems to be an even more promising year for the space.
DFG Founder and CEO James Wo recently shared his thoughts with Finance Magnates on the subject and referred to the 2020 DeFi boom as “only the beginning.” This prediction seems to be based on the importance the foundation of DeFi has in the market and how growth has taken over protocols that promote decentralized concepts such as Ethereum and Polkadot.
January 2021 has seen all-time highs for Bitcoin on several occasions and a push to achieve the same milestones by the above mentioned Ethereum and Polkadot, which is a clear reflection of the potential developments that will be achieved in the near future on said protocols and market demand ahead of “more features and services presented to end-users.”
The list of top 20 assets in DeFi have mostly maintained a steady rise in prices with the highest gainers reaching over 150% year-to-date while mostly show double-digit gains in the same amount of time, with an average of 63% gains for the whole DeFi asset class.
James believes,
“DeFi will only continue to grow as new features are added, such as trading NFTs and other financial instruments that may not have high liquidity in traditional finance […] We will also see the incorporation of more features from traditional finance, like fixed-rate lending, in addition to the development of new features not possible in existing centralized financial systems.”
During a bullish market, such as the one we are currently witnessing, and the overall market capitalization of the whole digital assets space hovering around $1 trillion, it seems that not only are these DeFi products offering a valuable alternative to centralized or even legacy investment vehicles, but the underlying concepts are bringing a new era of technological advancements that could shift paradigms sooner than expected.
Two important factors that will most probably create positive reactions from investors, from retail to institutional, are the highly awaited next steps towards the change in consensus algorithm being undertaken in Ethereum, from PoW to PoS, and the final stages of the Polkadot parachain auctions that are expected to be held in mid-2021, both creating more scarcity of each token and potentially driving prices to never before seen levels. James adds,
“Protocol governance systems will continue to improve with the implementation of more advanced participation options, such as proxy voting.”
Editor’s Note: James Wo is an active investor and the Founder of Digital Finance Group (DFG), a firm that manages investments in excess of $550M. He oversees a digital asset fund that is largely outperforming the market and a VC portfolio that includes Polkadot and its ecosystem projects such as Bifrost, Tidal, Crust, Acala, and more. He’s also managed investments in Brave, LedgerX, Bloq, and Circle. Additionally, James is the Founder and Chairman of Ethereum Classic Labs, the leading supporter of Ethereum Classic (ETC), a public blockchain with a market cap of $1.5B. He is Chairman of Matrix Exchange Ltd., a licensed virtual asset trading platform and custodian regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market in UAE. To read more from James Wo, view his recent op-ed, Economic Uncertainty Spells Good Things for DeFi in 2021 in The Daily Hodl.
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