In 2021, a lot of things happened in the crypto realm. As we kick off 2022, we take a look back at the cryptocurrency in 2021 which has clearly seen an increase in interest on all fronts such as investing, crypto trading platform, crypto payments, etc.
In fairness, crypto had a wild year in 2021. However, investors, experts, and crypto trading platforms are optimistic that this year could be the tipping point for cryptocurrencies, given the number of events that took place in the crypto sphere last year.
Recap Of The 2021 Crypto World
The surge in NFTs popularity
2021 began with a hot topic that continued throughout the year: non-fungible tokens (NFTs).
NFTs are digital tokens that are linked to the blockchain and represent something unique. NFTs are valuable because they can verify the validity of both digital and physical goods. The NFT, above all, cannot be changed or copied.
Beeple was the most expensive NFT in 2021, selling for about 40,000 Ether (approximately US$69 million). In 2021, gaming with NFTs has also gained traction, with Axie Infinity being the best example.
Axie Infinity is an NFT-based game with Pokemon and Tamagotchi influences. Trading, dueling, and even breeding adorable new characters known as Axies are all ways to earn money while playing. NFTs represent each Axie, which is unique.
More businesses and companies embraced crypto
More businesses and companies took cryptocurrency and crypto trading platforms more seriously as more attention was paid to them. Companies and businesses were involved in a variety of ways.
For starters, Tesla and Square both have Bitcoin reserves. Tesla revealed in February that it had purchased $1.5 billion in Bitcoin and was holding it as a reserve. Square also purchased $170 million in Bitcoin as reserves shortly after.
That was a watershed moment because it demonstrated to institutions and individuals that crypto, like gold, can be used as a reserve asset. Crypto is often referred to as “digital gold” because of its finite availability and inability to be counterfeited.
Adidas and Nike also joined the metaverse sneaker warfare. For their “Into the Metaverse” project, Adidas worked with Bored Ape Yacht Club, allowing fans to purchase limited-edition Adidas goods as an NFT. Nike has also purchased a virtual shoe and sneaker startup.
Governments around the world embraced cryptocurrency
As more businesses and companies embraced cryptocurrency and crypto trading platforms soared, countries are clamouring for a piece of the pie. Of course, we can’t ignore one of the year’s most important stories: El Salvador’s embrace of Bitcoin.
El Salvador’s government shocked the globe in September by announcing that it now accepts Bitcoin as its national currency, making it the first country to do so.
Development of Digital Currencies (CBDC) by Central Banks
When it comes to national currencies, the CBDCs must be mentioned. CBDC is a digital currency that is based on a central bank-developed blockchain. Although no single currency dominates the market, China’s Digital Yuan is the most famous effort. China’s central bank has already conducted testing in places such as Shanghai.
The transition to a CBDC would be intriguing because most Chinese now use e-payment on a daily basis. Project Ubin in Singapore and the Digital Euro in Europe are two more significant CBDC projects.
The all-time high market capitalization of $3 trillion
Another highlight from November was the overall market capitalization of crypto, which eclipsed the likes of Apple and Microsoft with a value of over $3 trillion. In 2022, the crypto market capitalization may be on a collision course with gold.
Rise of Bitcoin ETFs
Bitcoin Exchange-Traded Funds, or ETFs, finally made it to the major stock exchanges and crypto trading platforms after years of speculation. And this launch brought Bitcoin one step closer to being a globally recognized asset.
While the price of a Bitcoin ETF is still primarily tied to one unit of BTC, it can also include other asset values to help investors reduce risk and diversify their portfolios.
Why More People Invested in Crypto In 2021
Analyzed search results revealed that people are becoming more interested in cryptocurrency and the popularity of crypto trading platforms has increased. Companies have begun to use Bitcoin as a reserve currency, and governments have begun to experiment with Bitcoin and other cryptocurrencies.
We witnessed the tipping moment for crypto adoption in 2021, as individuals, governments, and businesses all become increasingly involved in cryptocurrency. This huge level of acceptance across all areas indicates that cryptocurrency will play a big role in 2022.
Despite the instability in the digital asset, interest and demand for Bitcoin increased dramatically in 2021. Over half of existing investors have invested in the last year.