2021 has ended but the year was no more than a roller coaster ride. Right from the succession of Joe Biden as the President of the USA to a massive worldwide vaccination drive against coronavirus, the year kept us on our toes. Some will remember it as the year where the Evergreen container obstructed the Suez Canal while others might remember it as the year the Taliban came back to power.
The fact remains that 2021 will undeniably have a special remembrance whenever we reflect on global security concerns, major economic decisions, or fight against climate change. But what about the world of cryptocurrencies and blockchain? While some might chuckle and think about the rise of Dogecoin, 2021 was much more than that. Let’s look at some key events that happened in 2021 that will influence the industry for years to come:
# Twitter supporting crypto
When Jack Dorsey changed his Twitter bio to just ‘#bitcoin’ while holding the position of CEO of Twitter, the crypto community went crazy. This was followed by the announcement of Twitter on assembling a team named ‘Twitter Crypto’ that will oversee the integration of cryptocurrencies and blockchain solutions on this social media giant. The tip jar feature where the users can support content creators on the platform will also include cryptocurrencies as a medium of payment.
Reportedly, the team will experiment with blockchain technology to create and adapt the platform to personalized decentralized ledger solutions.
# NFT boom
It started when artist Mike Winkelmann, also known as Beeple, sold his digital artwork ‘Everyday: The First 5,000 Days’ in the form of NFT(non-fungible token) for a whopping $69 million in an auction. This slingshotted NFT’s into the mainstream market resulting in an NFT boom. Prominent artists jumped on the scene to sell their artworks and were enthusiastically received by the investors.
The NFT craze was not limited to the artwork but involvement in video games and other fields with companies going as far as listing virtual land as NFT’s to buy. The NFT market recorded a record-breaking trade of $23 billion, its highest so far since its beginning in 2014.
# Bitcoin surpasses $1 trillion in market cap and hits an all-time high
In a historic move in February 2021, Bitcoin for the first time crossed $1 trillion in market value. This happened to owe to major institutional investors and companies including Tesla, Square and others backing the cryptocurrency. This was also the year when Bitcoin price rose to an all-time high of $69,000 in November.
# Ethereum ATH
The year was an all-time high for multiple cryptocurrencies. Along with Bitcoin, Ethereum too touched its ATH in November. Its price rose to nearly $4900.
# Bitcoin taproot
The year saw Bitcoin overseeing a major upgrade after a long-time of 4 years. One of the most celebrated upgrades, Taproot, went live in late 2021. The upgrade involves the introduction of ‘Schnorr signatures’ that will make the transactions much more private, quick and cheaper.
A key feature of Taproot is that it has brought the feature of a Smart Contract on the Bitcoin ledger where transactions can automatically happen owing to underlying instructions code containing conditions agreed by the parties involved. The feature is popular owing to its high usage in the Ethereum network.
# Rise of meme coins
“It all started with a single tweet.”
Dogecoin had been a part of the cryptosphere started as a joke in 2013 based on a meme. However, it gained traction in 2021 when Tesla founder Elon Musk started tweeting about it. This resulted in a mania where thousands rushed to buy the cryptocurrency.
Another meme coin, Shiba Inu, also saw a rise in ownership owing to the meme and joke culture prevalent worldwide. Interestingly, Shiba Inu became the most viewed cryptocurrency in 2021, surpassing Bitcoin as reported by CoinMarketCap. Currently, there are more than 100 meme coins in circulation.
Keeping the humour aside, meme coins had an overall positive impact on the crypto community. It increased the awareness of cryptocurrencies among the tech-savvy audience, many of whom were priorly unaware of their existence. While hordes of youngsters flooded the crypto exchanges to get their hands on Dogecoin and Shiba Inu, a majority of those also invested in other mainstream cryptos like Bitcoin. Too much for a tweet, isn’t it?
# Bitcoin becomes a legal tender in El Salvador
In a historic move, El Salvador became the first country to adopt Bitcoin as a legal tender. The country passed a law that recognises the crypto asset as a legal payment asset that can be used for transactions and paying taxes. Citizens can now use Bitcoin along with USD to pay for goods and services.
# Indian crypto regulations
India’s stand on cryptocurrencies is a crucial issue for the global-crypto community. The country with the second-largest population can be a serious game changer when it comes to the adoption of cryptocurrencies or blockchain-based technologies. For now, the situation is heading in a favourable direction.
The consumer base of cryptocurrencies increased exponentially in the year with the rise of crypto exchanges, the year also saw a massive investment in crypto and blockchain startups in the country amounting to $638 million. The government too has softened their stand on cryptocurrencies abandoning the calls of an outright ban to the announcement of a bill discussing regulations surrounding the digital asset.
While India has softened their views on crypto as opposed to China, the country with the biggest population, that has been cracking down on cryptocurrencies since the beginning.
What holds for the cryptosphere in 2022?
The anticipation and craze surrounding cryptocurrencies are at an all-time high. This is in line with the expansion of defi solutions and the rapid adoption of blockchain across all major fields. While the volatility of cryptocurrencies dissuades any accurate price prediction, the trends show that cryptocurrencies will be here for a very long time. There is an economic revolution taking place in the form of cryptocurrencies and what surprises 2022 holds, that time will only tell.
