From the acceptance by the general public to the emergence of new digital coins, through the challenge of the central authorities on the notion of “currency”, 2021 will be remembered as the decisive year of cryptocurrency through the world. As the world braces for Web 3.0, people have now been exposed to the idea of ââembracing the digital ecosystem for currency in the form of digital tokens, instead of cash.
Bitcoin – the oldest and largest cryptocurrency in the world – was accepted by the general public with El Salvador, amid its dizzying rally throughout the year. Apart from this, blockchain-based technology has given birth to non-fungible tokens (NFTs) – being non-interchangeable – which are distinct from cryptocurrency.
The positive sentiment around crypto around the world has not only encouraged investors, but a whole new generation of crypto entrepreneurs with the intention of transforming the global financial system. The rise of crypto investors around the world is a testament to the fact that it has become the most popular investment avenue challenging traditional asset classes such as gold, stocks and real estate.
With major announcements in the crypto market globally, 2021 was truly the âYear of Cryptocurrencyâ. As we approach the end of 2021, here is a list of all the significant events that have helped crypto become a dominant voice of the future.
Elon Musk’s $ 1.5 billion investment
Tesla Inc, the electric vehicle company of billionaire Elon Musk, announced a $ 1.5 billion investment in bitcoin as part of its new policy and announced that it will accept currency as a form of payment for cars . After Tesla’s announcement in February 2021, the price of bitcoin surged by leaps and bounds, crossing the $ 48.00 mark – its biggest daily rise in more than three years. Within a week, bitcoin made history by crossing the $ 50,000 mark for the first time, gaining increased acceptance by large investors, especially after Tesla’s move.
Mainstream acceptance vaults increase bitcoin count
Bitcoin has witnessed a broader bull run since October 2020, since US-based online payment company Paypal allowed customers to use bitcoin on its network. However, Tesla’s investment became the latest in a series of significant investments that have driven bitcoin prices up, as U.S. companies and traditional fund managers have started to take the asset seriously.
That same month, the Bank of NY Mellon announced that it had formed a new unit to help clients hold, transfer and issue digital assets. The world’s largest publicly traded business intelligence firm – Microstrategy has announced that it will spend $ 600 million to buy more bitcoin. The company already had nearly 72,000 coins at the time of its announcement in February 2021, valuing its bitcoin holdings at around $ 3.6 billion.
China’s crypto crackdown
In May, the Chinese central government released a memo indicating a crackdown on Bitcoin trading and mining. In June, power supplies to industrial-scale Bitcoin mining farms in Zhundong Economic Zone in Xinjiang and Sichuan were shut down.
Chinese authorities believe the cryptocurrency is disrupting the economic order and facilitating illegal asset transfers and money laundering. Authorities also accuse crypto miners of wasted energy, fatal accidents in coal mines, posing a potential threat to the country’s efforts to reduce carbon emissions.
In September, China’s central bank declared all cryptocurrency-related transactions illegal and should be banned, sending a harsh signal about its determination to crack down on the industry.
In October, the United States officially became the largest hub for Bitcoin mining operations and businesses. China’s crackdown has created an opportunity for overseas bitcoin mining operations – leading to an infrastructure boom in North America, Russia, Central Asia and Europe.
El Salvador became the first country to accept bitcoin as legal tender
In September 2021, El Salvador became the first country in the world to accept bitcoin as legal tender, despite widespread cryptocurrency skepticism and international warnings about the risks to consumers. The government of President Nayib Bukele has claimed that the move would allow many Salvadorans to access banking services for the first time and save some $ 400 million in fees on remittances sent from abroad each year. .
Non-fungible tokens (NFT) go mainstream
Non-fungible tokens (NFTs) – a type of digital asset, the popularity of which has exploded this year, with NFT artwork selling in the millions of dollars. Traded since around 2017, NFTs gained popularity in early 2021, then saw another explosive jump around August.
An NFT is a digital asset that exists on a blockchain, a record of transactions kept on networked computers. NFTs are typically purchased with cryptocurrencies or dollars and the blockchain keeps a record of the transactions. While anyone can view the NFT, only the buyer has the status of the official owner.
Sales volumes reached $ 10.7 billion in the third quarter of 2021, according to data from market tracker DappRadar. In the largest NFT market, OpenSea, there were $ 2.6 billion in sales in October of this year, a massive increase from $ 4.8 million in October 2020.
India cryptocurrency bill
India’s highly anticipated Cryptocurrency Bill proposes to ban the use of crypto as currency and for payment systems. The new Crypto Assets Bill proposes to regulate the use of cryptocurrency in the country and lay the groundwork for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI). However, the bill is unlikely to be introduced in the current winter session of parliament, as the central government has yet to finalize the details of the legislation.
Cryptocurrency isn’t just for sending money or speculating, but could be used to build a whole new website, according to Bloomberg. This idea forms the basis of Web 3.0 – which would create financial assets, in the form of tokens, into the inner workings of almost everything you do online. Web 3.0 is the next step in the evolution of the Web, which seeks to make the Internet smarter or to process information with an intelligence close to that of humans.
The idea of ââWeb3 is to create software and platforms that do not depend on traditional businesses and Web 2.0 business models such as advertising. For example, users can pay for services directly using tokens. In an ideal world, Web3 services are supposed to be operated, owned and improved by communities of users, according to Bloomberg.
2022 and beyond – What lies ahead for crypto?
Here’s what the experts are saying: â2022 is starting to be a promising year for the crypto market as more traditional companies start applying for crypto licenses and building digital asset teams because, in As a financial product, crypto is too important to ignore.
Next year, we would see more and more players fighting for user acquisition and commercial players introducing crypto-related products to keep their existing users, or lose them in favor of crypto or decentralized finance. The remaining decade will be devoted to the massive adoption of crypto assets and the adoption of decentralized finance.
There is an urgent need for a crypto neutral education platform that can serve as a focal point for crypto awareness and knowledge among crypto investors, new or veteran, âsaid Charles Tan, head of the crypto industry. marketing, Coinstore, a Singapore-based cryptocurrency exchange.