These 3 Trends Are Driving Crypto Market Growth Now

Oct 6, 2020 at 19:28 UTCUpdated Oct 6, 2020 at 19:29 UTC.In such a fast-growing industry as crypto asset markets, it can be overwhelming to try to extract the main themes driving liquidity and investor interest.

The latest CoinDesk Research Quarterly Review focuses on three features that have exhibited astonishing growth in Q3 and are playing a significant role in the evolving maturity of the digital asset markets.

They are pegged to a fixed unit, but in reality their market prices fluctuate around that level.

Over Q3, the supply of USDC, the second-largest stablecoin by market cap, grew much more than that of tether, the largest stablecoin, even though the arbitrage opportunities were greater with USDT. This hints at a growing demand for USDC from institutional investors and traders: USDC is run by licensed, U.S.-based firms and has taken a more regulatory-friendly approach.

DeFi.Ethereum's market capitalization increased 60% in Q3 2020, growing from $25 billion to $40.5 billion by the end of September.

Aggregated as one, the market capitalization of DeFi nows makes up roughly 12% of total market value on the blockchain, and has emerged as the driving narrative for the Ethereum ecosystem.

While the ether futures market is still a fraction of that of bitcoin, it is starting to exhibit some catch-up activity.

It also highlights the evolution of crypto markets as a whole - a pre-requisite for a mature market is a lively derivatives market.

The derivatives market has been dominated by bitcoin futures.

Greater diversity will lead to a healthier market overall.