2021 was a pivotal year for the crypto industry with several records getting shattered. The crypto market registered a growth of 187.5% with the market cap touching $3 trillion briefly. Large-cap cryptocurrencies like Ethereum reached an all-time high as the industry welcomed a flurry of investments across sectors like DeFi, NFT gaming, and Metaverse. From government regulation to taxation and institutional investment, 2021 was a pathbreaking year for the crypto and blockchain industry. The year witnessed several significant crypto moments.
Source: World Economic Forum
The rise of innovative trends like NFT, metaverse, DeFi, and Web3 is a major reason behind the growth of the crypto industry. Regulation in different countries, KYC processes by different exchanges like Binance, Kucoin, Huobi, and FTX, and institutional investment by tech giants like Microsoft, Google, Amazon, and Apple are some of the most critical factors fueling the rise of crypto.
While there were several major developments related to the crypto market in 2021, here are some of the top crypto moments from the year:
- Government Regulation Across The World: The increasing trust in the crypto market is one of the key reasons behind the rise in investment. Individual investors from developing countries like Nigeria, the Philippines, Indonesia, and Thailand have contributed significantly to the rise in the market volume of cryptocurrencies. A key reason behind the increasing trust has been the regulation of the crypto market by different governments. Giant economies like the US, the UK, and India have regulated crypto transactions. To understand the significance of regulation- India has the highest number of crypto investors in the world. The step opens the doors for millions of new investors. Regulation has to be one of the most important crypto moments from 2021.
- BTC Market Cap Breaching $1 Trillion: The growth of Bitcoin, the world’s largest cryptocurrency by market volume, has been phenomenal in 2021. February 19 was the landmark day when the market cap of BTC breached the $1 trillion mark, reflecting the staggering rise in investment in the sector. Companies like Tesla, Microstrategy, Galaxy Digital, and Block Inc continue to accumulate more bitcoin at every dip.
- El Salvador Adopts Bitcoin As A Legal Tender: El Salvador is the first country to adopt bitcoin as a legal tender. Despite the reservations from several economic experts, the country’s government undertook the bold step in June 2021 to create a parallel digital economy and encourage transactions in digital assets in the country. El Salvador has extremely friendly laws for foreign crypto investors and bitcoin holders who want to set up their business in the country. It has to be one of the major crypto moments defining mainstream adoption going forward.
- Launch Of The First US Futures-Based Bitcoin ETF: The ProShares futures-based bitcoin ETF launched on the New York Stock Exchange. The launch of a bitcoin ETF is one of the biggest developments in the history of crypto globally. ETF is a revolutionary concept as it allows retail investors the opportunity to invest in crypto assets without owning them. This is probably the reason that it was a grand debut for ProShares bitcoin futures ETF. However, the SEC continues to have some reservations about spot crypto ETF.
- The Rise Of DAOs: Transparency is at the core of the crypto industry and DAOs (decentralized autonomous organizations) promise enhanced transparency in decision making. The key goal of DAOs is to increase the participation of the community for enabling voting-based decision-making. Several crypto organizations are adopting the model to build trust and have a dedicated community. The rise of DAOs started after ConstitutionDAO raised more than $40 million to buy a rare copy of the US constitution in November. DAOs have become a favorite topic of the media since then.
- NFTs Gaining Prominence: From artists struggling to monetize their work to gamers finding a way to take up gaming professionally, NFTs tend to solve several problems in the entertainment and creative industry. Essentially a digital representation of a work of art, NFTs enable artists and creators to monetize their work through tokenization. The sale of Beeple’s “Everydays: The First 5000 Days” for a whopping $69 million attracted substantial attention from investors toward NFTs, making it a hot topic for several months. The rise of NFTs is one of the major crypto moments from 2021.
Conclusion
2021 was truly a record-shattering year for the crypto industry with investments across sectors skyrocketing. The increasing interest of institutional investors and retail investors alike. From skyrocketing prices of NFT and Metaverse tokens to a more welcoming approach by financial institutions, we saw several path-breaking crypto moments take place. The numbers in the crypto industry bettered several predictions, paving the way for a steady rise in the digital economy. These factors certainly played a critical role in more and more retail investors adopting crypto. If the trend continues in the coming years, 2021 could be labeled as the pivotal year for the crypto industry.