Following significant volatility in 2020, cryptocurrency markets are currently experiencing record highs. This is especially true for Bitcoin, which has doubled in value over the past year and appears poised to surge higher in the months to come. What’s more, cryptocurrencies are outperforming traditional asset classes and have seen significant gains year over year.

The popularity of crypto trading has also led to increased interest in lesser-known currencies, offering traders new opportunities to diversify their portfolios. Below, we dive into the top crypto trends of the year and analyze how they can help you trade like the top traders.

The Biggest Crypto Trends of the Year

While cryptocurrencies have experienced ups and downs over the past year, they have also seen strong performance and are enjoying increased popularity as a result.

1. Ongoing Growth

Compared to traditional asset classes, cryptocurrencies have had much higher returns in recent months, with several showing gains above 200%. This is especially notable when compared to asset classes represented by the Nasdaq and S&P 500, which have had more moderate recoveries following the collapse of the markets last March.

2. The Emergence of New Digital Currencies

The growing popularity of crypto is also leading to a proliferation of currencies such as Tezos and Cardano, many of which have been created over the past three years. In fact, there are currently more than 5,000 cryptocurrencies in existence, up from 2,000 just a few years ago. This sharp increase is providing traders with opportunities to discover new currencies and get comfortable in the world of crypto trading.

3. Diversification of Crypto Portfolios

One of the other key trends of the year is an increase in portfolio diversification. Traders are increasingly looking at Bitcoin as a safe haven and finding new opportunities in other currencies including Ripple and Ethereum. Both of these currencies have seen significant growth since January of 2020, with Ripple having an 18% rate of user growth, while Ethereum has had a 50% rate of user growth. 

Other coins such as Cardano and Tezos have seen even more significant growth, with increases of 165% and 364% respectively. Although it is important to note that Bitcoin’s safe-haven status exists within the context of Bitcoin volatility, the original cryptocurrency is nevertheless enjoying a much more stable reputation than it had in the past.

Chart showing unique eToro cryptocurrency holders per asset

Chart showing cryptocurrency gains 2020

Trade Like the Top Traders

Another unique feature of eToro’s platform is the social trading component that allows users to engage in discussions and learn from their trades. This can be a great way to learn more about trading strategy, or even to replicate the trades of others.  

One of the other key benefits of social trading is that you can potentially increase your returns. In fact, eToro’s top 50 most copied traders of 2019 saw an average yearly profit of more than 29%. Social trading also allows you to leverage the knowledge and insights of these types of traders (such as QE4Everyone) to adjust your crypto trading strategy as well as your overall investment strategy.

Whether you are just getting started with crypto trading, or you are already a pro, navigating the ever-changing markets can feel like a challenge. As cryptocurrencies enter a new phase, staying on top of the latest trends and having the right tools at your fingertips can make a big difference. With eToro’s dynamic platform and portfolio management features, you can continuously improve your skills and your experience.

If you want to learn more about crypto trading, check out eToro’s platform to get started.

eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.
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