2 New DeFi Crypto Predictions for 2021
DeFi is catching on.
And I have two new predictions for 2021.
DeFi is decentralized finance. That basically means blockchain-backed finance without the middlemen — brokerages, banks, financial institutions or exchanges.
And if you remember, millennials distrust banks. So, they will flock to DeFi.
This is a new wave for America 2.0 that I’m sure every generation is going to want.
People were already going digital, as payment apps like Venmo and Cash App have brought in dozens of millions of new users.
Now that so many people are using digital payments for everyday transactions, the idea of cryptocurrencies is becoming much more accepted.
The demand for digital and decentralized technology is through the roof. The result: the rise of a DeFi revolution.
2020 was a monumental year for DeFi.
The total number of crypto addresses that interacted with DeFi platforms went from 92,719 to 1,172,208 — growth of 1,164%!
This year, we continue to see exponential growth as that number has already grown to nearly 1.6 million:
I don’t believe DeFi is going to slow down anytime soon. And I have two new predictions for you and a way to get more DeFi opportunities in your portfolio.
DeFi Prediction No. 1: Lending and Borrowing
Have you ever gone to a bank to apply for a loan? It can take weeks and stacks of paper for you to fill out.
You can do something similar with cryptos on a DeFi platform … except with less hassle.
Paul and I always talk about Ethereum (ETH) in IanCast, so let me use it as an example.
Say you just found a promising new crypto you want to buy, but you don’t want to sell your ETH.
Well, just like you might use your home as collateral when applying for a big loan at a bank, you can use your ETH in kinda the same way.
Your ETH would act as collateral for a loan in something like USD Coin (USDC). That’s essentially a digital dollar.
Then, you can use your USDC to invest in the other crypto. Eventually, you just pay the USDC back with interest.
You can also convert your money into USDC and use DeFi platforms as a savings account.
Better yet, you earn way more interest than you would in a bank — usually over 10% per year on DeFi platforms.
So, here’s prediction No. 1 for 2021:
I believe by the end of this year the amount being borrowed on DeFi platforms will be 7% of total consumer loans by commercial banks in the United States.
Right now, it’s about 0.53%. That’s $8 billion on DeFi compared to $1.52 trillion currently in commercial banks.
As you can see, the shift to DeFi is already trending up:
Millennials are the largest generation in the U.S. workforce.
And one study showed 71% of them would move their money to a digital platform and a full one-third said “we won’t need a bank at all in the future.”
So, yeah. DeFi is definitely going to be the future of America 2.0.
DeFi Prediction No. 2: Exchanges
It was the best advertisement for crypto I’d ever seen…
Earlier this year, we saw something crazy happen in the market.
GameStop suddenly went from about $20 a share to … $400!
The surge triggered a huge reaction from brokerage companies and exchanges to halt trading.
So investors were told: “You can’t buy or trade … only sell.”
And that right there made the best case for DeFi that I’ve ever seen.
Certain DeFi exchanges make a tokenized version of a stock so you can trade a stock on a crypto exchange.
In a DeFi exchange, no one has the power to tell you that you can’t trade a certain stock or crypto.
And decentralized exchanges (DEXs) have become one of the most prominent types of services within DeFi.
These exchanges trade 24/7 and are fully autonomous — no middlemen, trade halts or market trading hours.
Now for prediction No. 2…
I believe this year we’ll see a total of $1 trillion in trading volume on DEXs.
There was $134 billion in the first two months of 2021 alone, and March is on track to be $71.5 billion:
Your Way to Invest in DeFi
As you may know, Paul and I are getting ready to launch a brand-new crypto research trading service.
These trades could include a wide range of opportunities for you in DeFi, crypto, blockchain and more.
We’re currently beta-testing the service now.
But while we put the finishing touches on it, we’ll be sending out exclusive crypto updates to readers who want it.
It’s totally free. All you have to do is sign up here and we’ll get you more info on the happenings in DeFi and crypto before we roll the service out to everyone else.
And I’ll tell you about another crypto play and talk “tokens” in your Friday Bold Profits Daily next week!
Editor, Rapid Profit Trader