Which cryptocurrency sector is hot and which isn’t?

The new year began with a considerable fanfare in the cryptocurrency market. Under President Donald Trump’s cryptographic plan, America will become the “crypto capital of the world.” It suppresses the crypto market and promotes the innovative use of blockchain technology within financial markets; Bitcoin (Cryptography: BTC) Super power.

These promises are mostly held. The White House held its crypto summit on March 7th. But broader macroeconomic weaknesses have overturned the crypto market in the form of tariffs and fears of recession. With cryptocurrency down completely, it’s hard to tell what’s hot and what’s not. So let’s take a closer look at the key Trump priorities of cryptography.

Currently there are three hottest crypto sectors Decentralized finance (defi), real world asset (RWA) tokenization, and stablecoins. The easiest way to see this is to look at the crypto portfolio of World Liberty Financial, a Trump-affiliated crypto company that uses the “new era of finance,” a Trump-affiliated crypto company that uses taglines. It continued to buy highly publicized cryptography before the inauguration as a show in support of Trump’s crypto plans.

Currently, some of the largest holdings of Liberty Financial in the world are Ethereum (Encryption: ETH), ChainLink (Crypto: Link), ondo, Ghostand Eden. The company also owns two stub coins. Tether and USDC. All of these holdings somehow reflect the core thinking of Trump’s crypto plan. It creates new connections between the traditional and decentralized finance worlds.

Decentralized finance actually refers to placing traditional financial systems on the blockchain rail. Once you have a Layer-1 blockchain like Ethereum, you can build it on top of it. You can create new decentralized exchanges to trade digital assets. You can create new ways to borrow money and earn money. Additionally, reducing the inefficiency of modern financial systems can create enormous value.

Real World Asset (RWA) Tokenization is currently one of the hottest trends on Wall Street and is supported by such top asset managers Black Rock. Tokenization refers to the transformation of traditional assets (such as stocks and bonds) that can be traded on the blockchain into digital assets. Doing that will allow you to create new efficiencies and open the market to new participants. For example, it is now possible to tokenize highly illiquid assets (such as private equity or real estate) and place them all on all blockchains in the form of tradeable crypto tokens.

It may be difficult to believe that Stable Coins are hot right now. After all, they’re pinned one-on-one in the US dollar, so they’re always supposed to trade for one dollar. You can’t really guess with stubcoin (unless you bet they’ll lose their pegs), and many investors may not want to hold assets like USDC, or tethers that trade for $1 a day a day.

but, Coinbase Global Recently, Stablecoins may be Crypto’s biggest story of the year. Trump’s crypto plan calls for the use of stubcoins as a way to ensure that the US dollar remains the world’s best reserve currency.

To buy Stablecoins you will need dollars. And now the dollar is pouring into stubcoins at an unprecedented rate. The top five stubcoins have a total market capitalization of over $200 billion.

Three not-so-hot cryptocurrency sectors include those related to consumer applications of Memecoin, Artificial Intelligence (AI), and blockchain technology (games, Web3, Metaverse, etc.).

Remember the last Crypto Bull Market Rally? Meme coin prices such as Dogecoin and Shiba Inu The value was rising sharply. Celebrities have not spent millions of dollars from the boring APE Yacht Club collection. And people were buying digital real estate in Metaverse as a way to quickly acquire the rich.

Unfortunately (or fortunately, depending on your perspective), that type of speculative bubble is rarely coming back anytime soon. new Official Trump Memecoin is down around 85% from its high, and those who are not buying expensive NFTs when the threat of a recession is looming have not bought early attempts to combine AI and cryptography.

Are you sure the consumer crypto sector is not yet popular? Simply search for images from the White House Script Summit held on March 7th. This event is different from the cryptographic event we’ve seen so far. One iconic image New York Times It looks like a formal Wall Streetboard meeting. Participants wear dark business suits and ties, clap politely, and sit at a long, monotonous table under a gold chandelier, with Abraham Lincoln’s careful eyes.

At this point you’re probably wondering: why didn’t you mention Bitcoin? For one, Bitcoin is not a sector, it is a single asset. Second, Trump’s cryptographic plan focuses primarily on economic competitiveness and financial innovation. The stated goal is to “make America great again.”

As long as Bitcoin helps achieve that goal, that’s important. For example, if it helps to strengthen the US dollar and boost investors’ confidence in the US economy, if it pays the country’s $36 trillion debt load and helps bring new jobs to America, that’s important.

But for now it is probably more important to understand how the world of traditional finance and blockchain finance fits, and what it means for the future of American finance. I believe this is the key to knowing what cryptocurrency under the radar is the best investment opportunity right now.

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Dominique Bassult There are Bitcoin, Chainlink and Ethereum positions. Motley Fools introduces and recommends Bitcoin, ChainLink, Coinbase Global, and Ethereum. To Motley’s fool Disclosure Policy.

Trump’s Crypto Plan: Which Cryptocurrency Sector is hot and not? Originally published by The Motley Fool