After a super bull run of 2021, 2022 has not gone as per the plans of the bulls, and Bitcoin, along with other altcoins, has hit a down button. With most coins at least 60% of their last year’s high, many questions are being raised on the future of crypto and long term crypto prediction. While a lot of people believe the crypto buzz is all over, a lot of investors and believers feel that there could be a variety of reasons by crypto markets could bounce back. With more and more use cases now available, people feel that DeFi and NFT could be the key drivers for the longevity of crypto. Let us look at what the future for Physical NFT and Defi both look like.
Future with DeFi
If you have been in crypto, invested, or even read about it over the last couple of years, there is no chance that you wouldn’t have heard about decentralized finance or DeFi. To put it back into perspective, decentralized finance or DeFi refers to an online world of alternative financial services that are trustless, work without a central authority, and are powered by cryptocurrencies and blockchain. In DeFi, smart contracts replace the intermediary of traditional finance, and many on the street believe this is a game changer for the crypto world to flourish and stay in the game. 2021 was the year when the world saw the first glimpse of DeFi when a lot of projects, even in their infancy, showed signs that they had the potential to be game changers and change the face of finance forever. The world saw how exchanges could run without a centralized exchange authority in between, which was called a decentralized exchange.
Many projects also chose borrowing and lending business models similar to how banks work and what they bring to the table again without a centralized authority in between and all decisions being taken through the governance model. This also did give the user complete control of their assets. But all this came at a cost since the regulation was still not there, and not many people could still establish trust in the projects and how they were functioning. And before many could begin to understand, the market collapsed, scaring many people away even from the fundamentals of DeFI. Since many projects already have BUIDL and continue BUIDLing, it is believed sooner or later, and the regulators will focus on Decentralized Finance and get these projects under regulation. With people’s faith still attached to DeFi projects and with regulations coming in, DeFi could be equally big as their traditional counterparts, and just like CBDC, there could be a lot of traditional financial companies who could open the door to decentralized models, thus giving complete ownership of their asset to the owners.
Future with NFT
Like DeFi, many people had also aligned their faith in Non-Fungible Tokens (NFT), some for their user cases, some for their investment, and some because they are fun and bring them joy. Whatever the reason may be, many of these assets are now at a lot less than what they were a year ago, which has taken a lot of interest away from the people. According to the Chainalysis report, more than a million accounts were buying NFT at the start of this year, but now there are less than 500k or, to be precise, 491000 accounts that are actively buying NFT. And yes, from an investing perspective, it is a risk, especially for people who don’t understand the difference and use case of these NFT Collections and end up buying them just for fun. But none can deny the use cases that NFT have portrayed even when they were at an initial stage, especially in the industries of art and collectible, gaming, fashion, DeFi, events and ticketing, Metaverse, virtual land, etc.
While there could be several factors that could make or break the future of cryptocurrencies or blockchain but its wouldn’t be wrong to say that DeFi and NFT, with the initial potent they have shown,