Considering the amount of reach the crypto industry has acquired and the number of people entering the space, 2021 will be remembered as a defining year of cryptocurrency. Some of the buzzwords like NFTs, metaverse, scaling solutions, and DeFi were all over the news headlines, raising curiosity from the people around the world.
As mentioned by Ripple CEO Brad Garlinghouse in his Twitter thread, 2021 has been the watershed year for crypto. “Acceptance and awareness of the opportunity to bring billions of people into the global financial community have never been so clear,” wrote Brad, who also mentioned that 2021 was the strongest year ever for Ripple despite a lawsuit filed by the United States SEC in 2020. There are several significant reasons to call 2021 the year of crypto, so let’s take a look at the top 10 defining moments of the year.
The largest cryptocurrency by market cap, Bitcoin remained at the top position throughout 2021. It reached its all-time high value around $68,000 in November 2021, while Ether crossed the $4,800 mark around the same time. Apart from BTC and ETH, 2021 has been the best year for other cryptocurrencies including Solana (SOL), Terra (LUNA), and Axie Infinity (AXS).
Bitcoin experienced unprecedented institutional investments by global companies in 2021. Tesla CEO Elon Musk announced a $1.5 billion investment in Bitcoin and also mentioned that the company would accept BTC as payment. After this announcement in February 2021, the price of BTC has increased significantly in March. As of October 2021, Tesla holds roughly 43,200 BTC worth around $2.5 billion. Meanwhile, MicroStrategy’s CEO Michael Saylor added more BTC to the company’s reserve. As of December 2021, the company acquired 124,391 BTC, worth $3.75 billion.
In September 2021, the People’s Bank of China (PBoC) paired up with 10 other Chinese state authorities and announced a set of new measures to curb the adoption of digital currencies in the country. The Chinese central bank stated that all crypto transactions are illegal, and banned in the country. This crackdown also created new opportunities for overseas BTC mining in places like North America, Russia, and Europe.
El Salvador made history by being the first country to accept Bitcoin as a legal tender alongside the US dollar. The Bitcoin law came into effect on 7 September 2021, taking effect 3 months after the bill was passed. On the same day, El Salvador launched the Chivo wallet to allow citizens to make payments in Bitcoin. Social media channels were filled with people posting their purchases in BTC to popular companies like Starbucks, Pizza Hut, and McDonalds.
2021 was a prominent year for the second-largest cryptocurrency by market cap, ETH, which has witnessed a four times increase in its value in the past year. Ethereum’s London hard fork went live in August 2021 as the first step to complete its transition to Ethereum 2.0. Ethereum Improvement Protocols (EIPs) have been the center of attention as they are pivotal for the merger with proof-of-stake Beacon Chain. One of the crucial factors is the built-in ETH burn mechanism, which isolates a portion of ETH used to pay transaction fees.
There is more to cryptocurrency and its underlying blockchain technology than making profits from trading, staking, and lending virtual currencies. The next stage of evolution in web development is possible with crypto and blockchain technology. 2021 has been a very important year as the budding web3.0 industry developed considerably. Web3.0, as opposed to the present internet web2.0, can be described as a decentralized internet that runs on the blockchain, and allows users to have ownership stakes in platforms and applications.
Bitcoin and other cryptocurrencies were considered as a store of value or an asset class by a majority of investors. However, the concept of decentralized finance (DeFi) is allowing users to earn funds from crypto staking, yield farming, lending, usage of decentralized exchanges, P2P transactions, and other fintech products that integrate on-chain. 2021 proved that every financial product and service can be offered over the blockchain, which is more time-effective, transparent and cost-effective when compared to a traditional financial service.
2021 was an eye-opening year for anyone who considered NFTs a brief fad. NFTs were all over the news when Beeple’s artwork, “Everydays: The First 5000 Days” was sold for a massive $69 million at Christie’s auction house. The headlines of Beeple’s huge sale introduced NFTs to people all over the world. Several other NFTs like Cryptopunks and Bored Ape Yacht Club exploded in popularity in 2021, with artwork in these collections selling for millions of dollars.
NFT games rose in popularity last year by allowing players to monetize their game time and skills. For example, Axie Infinity is a play-to-earn (P2E) NFT game developed on the Ethereum blockchain, and has acquired a huge user base during the pandemic. Many users in developing countries like the Philippines managed to earn income by playing Axie Infinity when they were jobless. The Splinterlands, Gods Unchained, The Sandbox, and Sorare are a few of the popular NFT games. P2E NFT games are contributing to the full-fledged development of the metaverse universe by offering a metaverse-like experience to their users.
After more than 8 years of speculation, the first-ever Bitcoin ETF was launched on the New York Stock Exchange by Proshares, a Maryland-based specialized exchange-traded products provider in October 2021. The debut launch was a massive hit as the funds closed the day with an increase of 4.8% in its price. The trading volume on the first day was a whopping $1 billion, which made it the second-most heavily traded ETF.
Considering the significant developments in the industry that tools place in the last year, 2021 was definitely the year of cryptocurrency. Who knows what 2022 will bring?