Fresh institutional and retail investor inflows into the cryptocurrency market have led to bull market circumstances for a lot of high tokens from blue-chips like Bitcoin (BTC) and Ether (ETH) to extra not too long ago established DeFi tasks like AAVE and Synthetix (SNX).
Exchange tokens are one other simply ignored sub-sector of the market however they’ve been performing exceptionally nicely in 2021 as will increase in buying and selling volumes ends in a bigger pool of charges to gather when the alternate’s native token is used for settlement. Native alternate tokens are additionally usually used as the bottom pair for funding new listings and token buybacks.
Here are three of the top-performing alternate tokens in 2021 that proceed to see upside potential as new traders flood into the market.
Similar to the expertise of CryptoKitty customers in 2017, the decentralized finance group has found that the principle disadvantage of elevated utilization of the Ethereum community is excessive gasoline charges and lengthy transaction instances.
As a outcome, centralized exchanges and their related native tokens have seen renewed curiosity as new options like staking, yield farming and collateralization enable traders to revenue from holding their investments. These new choices additionally enable traders to take part in DeFi-like choices with out worrying about impermanent loss and so they additionally obtain entry to the most recent coin listings.
Binance Coin (BNB) not too long ago skilled a value breakout to a brand new excessive of $349.13 on Feb.19 as the highest alternate by quantity evolves each its centralized and decentralized alternate capabilities alongside additional upgrades to the Binance Smart Chain.
Several DeFi-related tasks, together with Venus (VNS) and Linear Finance (LINA) launched on the BSC in latest weeks which makes use of the BNB token to pay transaction charges on the community.
Binance additionally provides a frequently increasing listing of “investment products” that enable customers to lend their tokens to the alternate swimming pools in return for various levels of yield alternatives relying on lock-up intervals and token demand.
Popular cash are rapidly added to the rising listing of tokens with choices or futures buying and selling capabilities, providing one thing for each devoted group members as nicely as pessimists who would relatively take their probability at shorting newly listed belongings.
Trading quantity dominance and the advantages of getting the first-mover benefit level to additional upside potential for the Binance ecosystem and BNB.
Binance’s regular enlargement and its energetic undertaking incubator and Binance Smart Chain are designed to problem Ethereum’s dominance within the sector, thus there stays a powerful risk that BNB might see an extension of latest positive aspects.
The conventional finance and cryptocurrency markets are slowly starting to merge and creating merchandise for all sorts of merchants. In 2020, derivatives exchanges additionally elevated in recognition and their buying and selling volumes steadily rose to new highs on a weekly foundation.
Following the U.S. authorities crackdown on controversial derivatives alternate BitMEX, the door was opened for a more moderen, extra group centered choice to fill the hole.
FTX Token (FTT) is the alternate token for the FTX cryptocurrency alternate which acquired its begin in the summertime of 2019. For a lot of that first 12 months, FTT traded under $2 with a median buying and selling quantity of $2 million as the alternate labored on establishing itself and attracting new customers.
The alternate started to see an uptick in exercise in 2020 which coincided with a rise in buying and selling quantity for FTT as nicely as its value.
As the platform expanded, further performance was added to the token which now contains price rebates, staking and a ‘Buy & Burn’ mechanism that helps lower FTT’s circulating provide to extend token worth.
Since Dec.11 when FTT was buying and selling at $4.12, a surge in shopping for quantity which reached a peak of $270 million on Feb.19 has propelled FTT to a brand new document excessive of $35.01 as the alternate is quickly changing into the go-to derivatives alternate for the cryptocurrency group.
KuCoin Shares (KCS) has been a late bloomer on this bull market, sustaining a comparatively flat token worth till the start of February when a sudden uptick in buying and selling quantity helped elevate KCS value from $1.19 on Feb.2 to a latest excessive of $3.99 on Feb.19.
VORTECS™ knowledge from Cointelegraph Markets Pro started to detect a bullish outlook for KCS on Feb. 18 when it reached a excessive of 66, lower than 24-hours earlier than the worth breakout.
The VORTECS™ rating, unique to Cointelegraph, is an algorithmic comparability of historic and present market circumstances derived from a mix of information factors together with market sentiment, buying and selling quantity, latest value actions and Twitter exercise.
A scroll by way of the undertaking’s Twitter feed reveals that on Feb.4 the largest announcement popping out of the alternate was the itemizing of the favored blockchain-based video streaming platform Theta, which had beforehand been troublesome to acquire for U.S. residents.
KuCoin additionally provides a rising listing of tokens obtainable for derivatives buying and selling alongside with numerous methods to earn by way of staking or offering liquidity, with charges generated by the platform distributed to token holders who hold their KCS staked on the alternate.
DeFi hype overshadows alternate token positive aspects
DeFi could also be dominating the dialog within the cryptocurrency sector proper now, however main points together with gasoline charges stay a barrier to widespread adoption.
While the roll out of layer two options might supply some aid to this downside, issues about liquidity throughout separate blockchains proceed to pose important obstacles to a easy, low-cost buying and selling expertise.
Many who’re chasing the DeFi hype fail to appreciate that widespread token listings and decrease buying and selling charges have led to a resurgence in using centralized exchanges.
This interprets into a bigger person base that conducts extra transactions, resulting in a rise in buying and selling volumes and wholesome value appreciation for underlying alternate tokens like BNB, FTT and KCS.
Centralized exchanges nonetheless seize nearly all of buying and selling quantity and this doesn’t look like altering anytime quickly. While decentralized exchanges like Uniswap and SushiSwap are rising in prominence and starting to eat into the market share of centralized exchanges, they nonetheless comprise solely a small portion of whole buying and selling quantity seen within the cryptocurrency market.
The battle between exchanges is constant to warmth up and as lengthy as that is the case, the elevated influx to alternate tokens might result in future upside.
The views and opinions expressed listed here are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer entails threat, it’s best to conduct your personal analysis when making a call.