Top 6 Trends in Crypto You Should Follow

Cryptocurrencies have been among the most talked-about technological trends in the last few years. As with most other vital trends before the advent of the Covid-19 pandemic, digital assets gained popularity as crypto experienced continued adoption throughout different sectors of the economy.

The economic lockdowns due to the pandemic accelerated the digital currency transformation that made 2021 a remarkable year for cryptocurrencies. 2022 is likely to continue witnessing significant achievements and breakthroughs that will see cryptocurrency redefine the future of finance as new developments emerge daily.

If you own any form of cryptocurrency, you want to become part of the emerging future and enjoy the first-mover advantage; you need to know the leading crypto trends to make more informed investment decisions. The following are top cryptocurrency trends you ought to follow:  

Use Your Existing Cryptocurrencies as Collateral for a Loan

If you have a project you are pursuing or have an emergency, you can take a cryptocurrency-backed loan similar to any other secured loan. Instead of using your home or car as collateral, you can place your digital assets as security and borrow some cash.

Smartcredit.io peer-to-peer lending platform facilitates the provision of microloans between users. Some advantages associated with taking cryptocurrency-backed loans include the lack of an international barrier. Unlike fiat currencies, cryptocurrencies operate globally, meaning a borrower can avail financial partnerships with crypto-backed lenders from just about anywhere in the world.

Earn Interest from Offering Crypto Loans

There’s always the temptation to hold on and hope that prices will appreciate for most people who own some cryptocurrency. However, instead of just sitting on your crypto holdings, the better thing to do is to avoid simply banking on higher prices but rather act as a bank yourself.

You can earn a tremendous interest by lending your digital assets to interested borrowers who’ll return them with interest. Similar to what banks and brokerage firms do, lending crypto through collateralized loans backed by clients’ securities is an ingenious way to use your digital assets.

Put Them Up For Stake

Staking refers to a method where you earn rewards or interest when you lock down your crypto for a certain amount of time. If you own cryptocurrencies like Solana, Polkadot, Ether, and Cardano, you earn a passive income on your holdings by committing them to support a blockchain in addition to confirming transactions. 

Staking usually happens through a staking pool comparable to an interest-bearing savings account. In most cases, you could earn anywhere between 5 and 20 percent annually on the crypto assets you have staked. You earn because the blockchain will put your crypto holdings to work using a consensus mechanism called proof-of-stake that ensures all transactions are secure and verified.

Yield Farming

Yield farming is yet another popular trend in cryptocurrency investment that involves lending out digital assets to decentralized exchanges, thus contributing to their liquidity pools and earning interest on it in return. This is a highly lucrative project that offers high-interest rates, which in some cases could reach an annual percentage yield (APY) of over 100%.

APY refers to the annual interest you can earn on a deposit, with records showing cases where people have made over 1000% returns. Since the interest in paid in crypto, the earnings will depend on the value of your cryptocurrency of choice. 

Liquidity Farming or Mining

Liquidity farming or mining is a network participation strategy in Decentralized Finance (DeFi). Crypto holders get involved by providing capital or liquidity to decentralized exchanges and earning rewards. The rewards that participants earn are primarily acquired from the trading fees that accrue from traders who swap cryptocurrencies.

Depending on the liquidity farm you choose, you could get rewarded using the farm’s native token or a governance protocol that gives you voting and contributing rights toward the protocol’s future. The process creates a symbiotic relationship that enables the exchange to receive liquidity and fees while the participant trades in a decentralized market.

Automatic Investments

Auto investment is an ingenious way of earning passive income using your cryptocurrency holdings by choosing the digital asset you want to trade. Auto crypto investments are accomplished using software that will automatically conduct cryptocurrency trading on your behalf. Automatic investments work best for investors who lack the time required to monitor the trading graphs or want to make a long-term investment. Trading is conducted by connecting a bot to your account, and you can specify if you wish to invest monthly, weekly, or daily.

Final Thought

You can create a fortune using your current cryptocurrency holdings using one or more of the crypto investment trends mentioned in this article. Trust a platform like smartcredit.io to give you access to the features that matter most in your crypto investment journey.