2021 has been the best year for cryptocurrency so far since blockchain first positioned itself as the building block for the next phase of the internet — disrupting the entire global financial system with new business models.
In the last year, the aggregate value of cryptocurrencies tripled, we witnessed the phenomenal growth of new crypto applications such as Defi, NFTs, GameFi and the Metaverse, and major crypto-assets like Bitcoin, Ethereum, Binance, Cardano and Solana reached their new all-time highs. Without a doubt, the crypto space has a lot to look forward to as the new year begins.
Whether you’re considering investing in cryptocurrencies or determining your next move in blockchain innovation, the year 2021 saw a number of significant events that you should examine before making your next move in the new year.
Here are the top five notable crypto events of the past year that we cannot but mention;
1. Market Capitalization Surge For a long time, bitcoin has been considered the gold of cryptocurrency. Despite its volatility, bitcoin remains the investor’s preferred store of value similar to gold. In 2021, when bitcoin hit its most recent all-time high of $68,000, its total value surpassed $1 trillion based on its market capitalisation — the total value of an asset. Compared to gold, bitcoin’s market capitalization was 11% of the entire value of gold capped at $11,000,000,000. Alongside this, the global market capitalization of all cryptocurrencies reached $3 trillion surpassing the value of companies like Microsoft, Google, and even Apple, the world’s most valuable company in the world.
2. The rise of NFTs For a while, NFTs were considered a fad. They were new and had very little real-world application. In 2021 however, the art industry transformed that perception with the sale of multiple multimillion-dollar NFTs, chief among which is the 69.3 million dollar price tag attached to Beeple’s digital piece ‘Everydays: The First 5000 Days’. Likewise, many NFT collections topped the sales chart raking in millions of dollars. NFTs such as The Bored Ape Yacht Club — a collection of 10,000 unique Bored Apes NFTs living on the Ethereum blockchain with a floor price of $233,376 contributed immensely to the growth of the NFT space. The advent of the metaverse and the ability of NFTs to integrate seamlessly with it have also served to ensure that NFTs are here to stay.
3. Regulation and Legal Tender Due to cryptocurrency’s recency, most countries lack the necessary legislation to control its use. This has resulted in a crackdown on crypto transactions in many African countries, lowering the rate of adoption and investor trust. In September 2021 however, El Salvador, a Central American country, declared bitcoin as a legal tender and acquired a total of 1,270 bitcoins. In a similar move, the Zimbabwean government’s announcement to contemplate crypto adoption seems like regulation is on the way to supporting the adoption of cryptocurrencies.
4. The Elon Effect Considered a troll by many, Elon Musk has long been one of the world’s leading bitcoin influencers. His tweets have had a major influence on the price of coins over the years, particularly Shiba (SHIB) and Dogecoin (DOGE). In 2021, Musk-led Tesla purchased $1.5 billion worth of Bitcoin spearheading a new generation of companies holding assets in crypto. This move proved critical to increasing investor confidence in the future of bitcoin and cryptocurrencies as a whole. Tesla’s decision also encouraged other companies like Microstrategy to include bitcoin presence in their balance sheets further shoring up trust in the system.
5. Hacking Occurrences 2021 wasn’t all roses for crypto. Although security is often highlighted as one of the benefits of blockchain technology, there are risks involved especially when your crypto assets are hosted in wallets on third-party servers. According to Comparitech data, an estimated $4.25 billion in crypto assets was stolen by hackers last year, with six of the top ten biggest hacks of all time occurring in 2021 alone. The biggest hack however was the Poly Network hack when a white hat hacker stole $610 million. Fortunately, the entire amount was returned and the security vulnerability was patched with cooperation from the hacker.
Looking Ahead The events that defined 2021 had a significant impact on the crypto market, hence, driving its popularity, and some of them will continue to have a huge influence on investor confidence and market optimism in 2022. While 2021 was the year of growth and expansion, 2022 promises to be a bigger year with more crypto adoption globally.
As more DeFi solutions emerge to solve global payment issues, offering an inclusive economy to the people, the demand for cryptocurrency — especially in Africa — is expected to increase despite legislative rebuff.
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