The last year witnessed unprecedented growth in the cryptocurrency market as COVID-19 sped up the pace of digital change. There is some proof that 2021 will be considerably more decisive for future developments in the crypto world. With Bitcoin's value escalating to all-time highs, it turns out there are many factors that continue to push Bitcoin’s value higher and higher. Here are the current trends driving BTC trading in 2021.
Miners Holding Bitcoin
Miners predominantly operate on cash and liquidate holdings to meet expenses. However, a miner’s selling pace differs occasionally based on mining-specific factors and Bitcoin’s price expectations. While miner flows make up a small part of the total network volume, accumulation by miners is equivalent to the increased holding of corporate stock and is viewed as a positive indicator for price. Their spending patterns give us an understanding of the sentiment of some of the biggest bulls in the Bitcoin market.
Miners today have a net accumulation of liquid assets, and they likely have sufficient funds to run their operations for the foreseeable future. This is possibly due to having liquidated holdings when Bitcoin was valued at $20,000 and $40,000. Also, many miners are likely holding on to the Bitcoin they have mined, expecting a price rally.
BTC Whale Moves
While Bitcoin reached new all-time highs in recent weeks, old coins, sitting idle for many years, have started to become active on the network. BTC whales moved 21,334 Bitcoin within 2 hours after BTC jumped above $60,000 per token during the first week of April 2021. This increased Bitcoin’s market cap past the $1 trillion mark and Bitcoin whales have played an important role in this development. Due to the jump in Bitcoin’s institutional adoption, there has been a sharp and sudden increase in the network’s activity, as well as its whale activity.
Rise of DeFi Exchanges
Decentralized Financial services (DeFi) are expected to rise in 2021. A decentralized open-source network can revolutionize the entire financial system. Wisebitcoin acts as a peer-to-peer exchange where users can find financial services on a distributed ledger for loans, insurance, margin trading, exchange, and yield farming (yielding rewards from staking digital assets on a network to help build network liquidity).
Risk Assessment Models to Improve
With the rise in Bitcoin’s value, there’s an urgent need for a high-quality risk assessment model. It can be difficult for users to assess their crypto investment results objectively without succumbing to the general rush or flow of everyone else in the market.
Exchanges offering an efficient solution, and not just “digital fortune-telling on the coffee grounds,” will grow to grab the attention of traders and their wallets.
As per CoinMarketCap, there are several thousand different cryptocurrencies, but most traders are only familiar with high market cap tokens. As a result, many projects do not receive the attention they deserve, and many more do not gain prominence for other reasons such as a lack of funding, internal conflicts, or government regulation. On the whole, few crypto tokens - if any - have delivered returns on investment greater than Bitcoin.
At the same time, those who intend to invest in crypto need to consider a variety of factors that can raise or collapse the value of a particular coin:
- Organizational: For instance, which country the responsible organization and the crypto exchange works in, and what authoritative changes are occurring there, either for or against digital assets;
- Technological: Errors in the codebase and weak data security and protection can help cybercriminals steal cryptocurrency;
- Counterparty risk: This is defined as when the other party in an investment, trade or transactional deal does not fulfill his or her contractual obligations as part of that deal. Crypto scams, “rug pulling,” and pump-and-dump schemes are examples of how investors can be harmed by the actions of others in unregulated or unsecured trading environments.
Today, in the crypto world, there is less uncertainty, and there are more opportunities for developing analytical tools. However, it is still difficult for novice investors to understand the intricacies of alternative finance, which is why it is so important for users to have access to secure, intuitive, and trusted cryptocurrency platforms such as Wisebitcoin.
Trade Smarter with Wisebitcoin
With Wisebitcoin’s user-friendly platform, novice and professional crypto traders with venues ranging from spot to futures trading can be accommodated. Providing an unprecedented level of liquidity needed for avid crypto traders, we have over 50 cryptocurrencies for spot trading, including USDT, BTC, and ETH. We also have perpetual trading options for USDT-SWAP and Coin-Swap in the futures market.
Because crypto-assets often exhibit high volatility, traders can count on Wisebitcoin’s Insurance Fund when participating in USDT perpetual swap contracts. The Insurance Fund prevents investor positions from being auto-deleveraged. This means positions will not be closed out if they cannot be executed at the liquidation price in the market. When a position’s loss is greater than its margin, the Insurance Fund kicks in to cover the loss. The Insurance Fund stores funds from previous successful liquidations. Whenever a liquidation is executed at a price better than the liquidation price of a particular position, those earnings go to the Insurance Fund.
This is an important feature from Wisebitcoin that can help prevent novice traders who may not be familiar or experienced with the price swings often seen in the crypto space from suffering losses due to price changes as market trades are executed.
Explore the Wisebitcoin cloud exchange and start trading with a global cryptocurrency community today. Check out ongoing promotions here to stay up-to-date with current and future events.