When it comes to picking winning coins in the crypto market, trendspotting can be a useful tool. If you can identify the next trend that will surface, this can be an advantage in finding the next big thing.
Let’s explore some of the most significant trends that have impacted the cryptocurrency market and the coins that gained popularity due to these trends.
Decentralized Finance (DEFI) Coins
DEFI coins, also known as decentralized finance coins, are blockchain-based financial platforms that operate independently of centralized financial institutions. With DEFI, people can deposit cryptocurrency as collateral for loans, or borrow cryptocurrency up to a certain percentage of their collateral value. Everything is automated through the smart contracts on the blockchain, including the calculation of loan terms, the collection of collateral, and the distribution of borrowed cryptocurrency. Lenders may also deposit crypto into the platform and earn interest that is paid out by the borrowers.
During the summer of 2020, DEFI coins like Uniswap (UNI) and Aave (AAVE) surged in value, with their market capitalization surpassing $5 Billion. Investors were attracted to DEFI because their services can be accessed without the need for banks or traditional financial institutions.
Metaverse Coins
The Metaverse is an online universe where people can interact with each other in virtual environments, as well as virtual objects and assets. The concept has gained a lot of attention over the past year. Blockchain technology enables the concept of digital real estate ownership, and metaverse coins like Decentraland (MANA) and The Sandbox (SAND) have seen tremendous growth in value, driven by the demand for virtual land and NFTs. Investors can buy land plots and later on sell them for a higher price, or rent out parcels to other users. The CEO of Tokens.com has invested more than $2 million dollars for a space in Decentraland’s fashion district.
Meme Coins
Meme coins are cryptocurrencies that often gain popularity through social media, memes, and internet culture. These coins do not necessarily have any practical use or utility, but their popularity drives their value. In 2021, the meme coin trend took the market by storm, with coins like Dogecoin (DOGE), Shiba Inu (SHIB), and SafeMoon (SAFEMOON) experiencing exponential growth in value.
Play-to-Earn Coins
Play-to-earn is a new trend in the cryptocurrency market that allows gamers to earn cryptocurrency by playing blockchain-based games. AXIE Infinity (AXS) is one of the most popular play-to-earn coins, with players earning AXS tokens by playing the game. In 2021, AXS’s value increased significantly, with the coin reaching an all-time high of $150 per token.
Artificial Intelligence (AI) Integration
AI technology is exploding this 2023, and blockchain projects are actively seeking ways to integrate AI into their systems. In our opinion, this would be one of the trends to watch out for. Examples of AI in crypto are Singularity NET (AGIX), CryptoGPT (GPT), and Fetch.ai (FET), to name a few.
SingularityNET platform connects AI developers with users, making it faster and more secure to trade AI services and products. It’s an AI marketplace where developers can charge for the use of their services by using the native AGIX token.
CryptoGPT is a blockchain technology that combines artificial intelligence (AI) and cryptocurrency. According to their website, they are the first sustainable ‘to earn’ ecosystem that pays users for contributing data that is then sold in the global data marketplace.
The platform is built on a blockchain technology called Ethereum layer-2, which is designed to make it easier and more affordable to use blockchain. The $GPT token is used to pay people who share their data on the platform.
Fetch.ai is a blockchain platform that uses artificial intelligence to automate transactions and tasks. It uses autonomous economic agents (AEAs) that are powered by AI, to perform various tasks such as finding the cheapest airline tickets or selling an item online to the highest bidder.
Here are some tips for trendspotting and picking winning coins:
- Follow the latest news! News about partnerships, new product launches, and regulatory changes can all impact the market.
- Pay attention to social media. Social media platforms like Twitter and Reddit can provide insights into the latest trends and what people are talking about in the crypto community.
- Look for coins that have a clear use case and solves real-world problems. These are the ones that are more likely to succeed. Research the projects and the team behind them to ensure that they have a solid plan for adoption.
While these trends have shaped the cryptocurrency market in recent years, it is essential to remember that the market is highly volatile, and investments can be high risk. Before investing, always conduct thorough research and stay up to date with the latest trends and developments. As new trends emerge and gain momentum, the market will continue to evolve, and investors need to stay informed in order to catch the next opportunity in the crypto space.
Related: AI in Crypto – The Risks and Rewards
