Cryptocurrency Markets follow predictable four-year cycles, but the psychology of bull and bear markets can be deceptive. The problem is that every dip is always followed by huge peaks, just like in the past. However, investors often assume that every major downturn will last indefinitely, just like the upswings.
DeFi and its potential
According to a World Bank report, 1.4 billion people worldwide do not have access to a bank account. This situation pushes rural areas, elderly and disadvantaged regions and groups into more challenging lives and poverty. Leora Klapper, Chief Economist of the World Bank’s Vice-Presidency for Development Economics, said:
“To reach these individuals, governments and the private sector will need to work hand in hand to develop the necessary policies and practices to build trust in financial services providers, confidence in the use of financial products, new product designs and a strong and implementable policy. consumer protection framework.”
Asset tokenization is a huge field, and we will see how this will make our lives easier in the future. But even at this stage DeFi offers disadvantaged groups access to financing through just a telephone and internet connection.
The daily trading volume in the DeFi space has passed $10 billion, and locked assets have increased from less than $1 billion to more than $100 billion in just two years. Eliminating middlemen leads to lower costs.
Lars Seier Christensen, Chairman and Founder of Concordium, says:
“Blockchain eliminates the need for intermediaries managing assets, allowing resources to be allocated in the most efficient manner, giving every member of society unbiased access to credit services. Blockchain is a powerful tool to correct the catalog of inefficiencies in the traditional financial sector by streamlining processes and facilitating greater inclusivity and higher levels of global accessibility.”
So why can’t the same be done with digital banking? There are thousands of problems, including the lack of banking services in certain regions, from the need for bank branches to registration procedures. However, DeFi offers a new financial environment that people from all over the world can participate in.
The Crypto Bull and DeFi
Bitcoin and cryptocurrencies are widely used in many African and Latin American countries. DeFi could see a similar adoption boom in the upcoming bull season. It may not be a vain effort JPMorgan Chase and Bank of America to explore options to adapt the existing DeFi system to traditional finance.
Bank of America stated:
“DeFi applications require development to differentiate themselves and create a unique user experience that increases adoption and usage. Greater adoption and usage lead to higher revenues and appreciation of local tokens, both of which can be reinvested in further development. While DeFi applications are still in their infancy, we are in the early stages of a significant change that could occur in applications over the next thirty years.”
Below are some DeFi projects that are currently at the top in terms of volume and have the potential to grow in the next bull season:
- DYDX
- Uniswap
- PancakeSwap
- Curve
- GMX
- orca
- Kine protocol
- Top
- Balancer
Disclaimer: The information in this article does not constitute investment advice. Investors should be aware of the high volatility and associated risks of cryptocurrencies and should do their own research before making any trades.