Going into every new year, crypto enthusiasts reflect on past events in hopes of better understanding future trends. The challenge is the information needed to make educated assessments are hardly found in one place. We aim to eliminate hours of researching for investors by putting together a compendium of significant events from the past year. Here are some of the notable events of 2021.
Facebook Changing its Name to Meta and Making Moves to Create its Metaverse
Zuckerberg stated that the company will now be Metaverse first and not Facebook first. He believes that the company’s close link to one product doesn’t properly represent everything they do today, let alone the future.
However, the Metaverse concept has been mainstream, and Zuckerberg has constantly talked up his new vision even before the October 28 announcement.
He believes that technology has consistently evolved, and the next platform and medium will be more immersive and embody the internet where you are in the experience and not just viewing it.
Though its vision is to expand to virtual spaces where individuals can interact via digital avatars, Meta will not alter its corporate structure and will continue trading under its ticker symbol MVRS.
Jack Dorsey’s First Tweet NFT Sale
Former Twitter CEO Jack Dorsey sold his first tweet, “just setting up my twttr” from March 21, 2006, as an NFT for $2.9 million. Dorsey put up the tweet for digital auction as a non-fungible token (NFT) on March 5. Bids were handled by the platform, Valuables by Cent, which allows folks to bid on autographed tweets.
Bids on “just setting up my twttr” quickly escalated, and the winning offer was made by the CEO of blockchain company Bridge Oracle, Sina Estavi, who paid using Ethereum (1630.5825601 ETH).
Dorsey declared that the proceeds would be converted to BTC and donated to the Give Directly Africa Response fund.
In a related story, Estavi took to Twitter to express his happiness. He believes that people will realize the tweet’s value years later, even comparing it to the Mona Lisa painting.
The Crypto Surge in April and ATHs Broken
Bitcoin’s value reached a new ATH of $63,000 (£45,800) in April.
The digital asset, which has increased in value by 450% in the previous six months, increased by 5% during trade on April 13.
It’s worth noting that since the beginning of 2021, the price of Bitcoin has more than doubled. That’s after being on a rollercoaster ride in the previous year, with the price hovering around $7,000 in April 2020.
The smaller, rival cryptocurrency Ethereum soared as well, reaching a new ATH of $2,205. Other cryptocurrencies to reach new highs within the month included BNB, Solana, MATIC (Polygon), and Polkadot.
The Development of Bitcoin Taproot
Jonas Nick, A.J. Towns, Pieter Wuille, and Tim Ruffing are the authors that wrote the three BIPs that form Taproot, Bitcoin’s most significant upgrade in four years.
Taproot provides a valuable collection of tools for developers to integrate newer features to increase privacy, scalability, and security on the BTC network.
In truth, the changes are more in the “technical” and “future potential” categories than in the immediate and tangible. However, when it comes to assessing some of the most significant developments on the BTC network in 2021, the work of Jonas et al. to make Taproot a reality cannot be overlooked.
Adoption of Crypto 401k
In June, ForUsAll, in partnership with Coinbase, announced the Alt401(k) launch. The Alt401(k) is an investment platform that allows employers to offer alternative investment options within 401(k) packages. In addition, employees can leverage the medium to add cryptocurrencies to their 401(k) investments.
However, ForUsAll is not the first firm to offer crypto in 401(k) plans. Other companies like Digital Asset Investment Management and BitWage are also working to bring such investment alternatives to traditional retirement plans provided by employers.
Investors can already gain exposure to cryptocurrencies via their retirement accounts, and some experts believe that there’s a growing appetite to extend that to 401(k) plans.
Yet several traditional industry players remain skeptical that employers offering retirement plans will want to offer these investments.
As the idea keeps cooking, there’s an ongoing debate on whether including these types of investments into 401 (k) plans will ultimately help or harm investors.
The SEC considered and rejected Bitcoin ETFs multiple times in recent years. Finally, there was a significant breakthrough on this front in 2021 as the first Bitcoin ETF (BITO Bitcoin ETF) debuted on the New York Stock Exchange (NYSE) on October 19.
And it generated a lot of buzz too. According to ProShare, the fund’s sponsor, the BITO Bitcoin ETF hauled in approximately $570 million of assets on its launch day. It also generated roughly $1 billion in trading volume on the same day.
The above data signified how hungry investors were for bets on BTC as prices approached an all-time high.
The BITO Bitcoin ETF approval represents a newer and more conventional approach to investing in crypto. It allows investors to acquire bitcoin directly from traditional investment brokerage accounts.
Yet, many believe the BITO ETF isn’t enough. Though linked with Bitcoin, the fund does not hold the asset directly. Instead, it holds Bitcoin futures contracts.
However, experts have emphasized that while BTC futures follow the asset’s general trends, they may not track BTC prices directly.
As of writing, investors continue to wait for an ETF that holds BTC directly.
Cardano’s Alonzo Hard Fork
Cardano achieved a major milestone in its timeline in September. Its blockchain launched Plutus-powered smart contracts as part of the Alonzo hard fork.
Cardano’s Alonzo hard fork has been eagerly anticipated by the Cardano community and the entire cryptocurrency industry.
Cardano’s smart contract feature is intended to enable it to become a platform where developers can build DApp and even mint NFTs. This landmark has been heralded as the moment in the network’s development where the “mission truly begins.“
However, the milestone’s launch didn’t prevent Cardano (ADA), the network’s native token, from slipping into the broader slump that has seized the cryptocurrency market since BTC rapidly plummeted below $43,000 on September 7.
Following the Alonzo hard fork on September 10, ADA plunged 10% to an intraday low of $2.3, whereas BTC and ETH declined just 4% and 6.97%, respectively.
Coinbase Public Listing
Coinbase Global, the largest crypto exchange in the US, went public on April 14 as the company took advantage of soaring demand and prices for BTC, ETH, and other digital currencies.
Like Roblox and Spotify (SPOT), Coinbase listed its shares on the NASDAQ directly, rather than selling new stock via an IPO.
Its shares started trading at $381/share, an over 50% increase from the stock’s reference price of $250/share. The stock soon rose to a high of over $430 before settling at around $328, representing a gain of nearly 30%.
At that price, Coinbase was worth nearly $86 billion after its first trading day.
Also, the move turned Brian Armstrong, CEO of Coinbase, into a mega-billionaire. His $39.6 million shares were worth just under $13 billion at the close of trading on April 14.
Coinbase made it to our top crypto wallets of 2022.
Solana’s Meteoric Rise
Solana (SOL) steadily increased in value, with no indications of slowing down in 2021. This is especially true given Grayscale Investments’ announcement that it will be adding SOL to its portfolio.
Grayscale’s addition of Solana to its portfolio offered new investors exposure to the cryptocurrency, presenting the asset to more large-scale and high-end investors who can acquire and hold vast quantities of the digital asset. In addition, the inclusion of SOL to Grayscale highlights Solana’s development as a project. The blockchain project, launched in March 2020, has emerged as one of the strongest platforms to compete with Ethereum.
The platform has attracted new dApps, NFT projects, and other blockchain ventures with its low costs and fees as well as fast transactions.
With new projects leveraging the Solana platform, the token has gotten a lot of attention from the industry. SOL has increased by over 10,700% year on year since its launch. The project is still in its early stages, but it is now the fourth-largest blockchain in terms of market capitalization. The low fees and fast speeds attract projects, while the over $70 billion valuation entices crypto and digital asset investors.
The Rise of Virtual Real Estate
Digital land is worth millions as individuals hunt for Metaverse virtual real estate. Interests in the digital universe soared in 2021 when Mark Zuckerberg rebranded Facebook Inc. to Meta to capitalize on the digital frontier.
According to Grayscale, Metaverse’s global market for goods and services will be worth $1 trillion.
The Metaverse is made up of multiple digital realms. The realms are 3-D virtual cities where avatars live, work, and play. If you have ever been exposed to video games like Animal Crossing or Fortnite, you’ve had an insight into how these realms look.
Elements like virtual reality, mobile gaming, video streaming, artificial intelligence, and avatars are combined to create an immersive digital experience.
Yet, virtual real estate remains highly speculative, and there’s an ongoing debate on whether this boom will be the next big hit or the next big bubble.
However, technologists predict the Metaverse will mature into a fully functional economy in a few years, providing a synchronous digital experience and interwoven into our lives as social networking and emails are today.
El Salvador’s Bitcoin Adoption as Legal Tender
On September 7, 2021, Bitcoin officially joined the US dollar as El Salvador’s legal tender. The move makes the Central American nation the first country to adopt BTC.
According to their President, Nayib Bukele, moving to BTC will help approximately 70% of Salvadorans (who don’t have bank accounts) transition into a formal financial system. He expects the move to facilitate more affordable and quicker overseas remittances for citizens as remittances are a significant income source for his heavily indebted country.
Bukele asserted that BTC adoption would reduce the annual commissions on remittances by $400 million, encouraging larger funds transfers.
However, several financial experts criticized the move. They pointed out that assets like BTC are highly volatile and speculative with no physical backing and prone to rise and fall in value. They also fear that such a move could encourage money laundering and related criminal activities in the nation. Critics are not alone, as most Salvadorans are also skeptical and would like to see the new BTC law flunked out.
Increased Adoption of CBDCs
As digital currencies proliferated in the private sector, governments began to carefully evaluate, though some have already issued CBDCs to substitute their national currencies.
The Bahamas became the pioneer nation to adopt CBDC with the Sand Dollar launch in October 2020. Fast forward 12 months later, ongoing CBDC pilots were being prepared for possible launch in 26 jurisdictions.
Furthermore, 81 nations representing over 90% of the world’s GDP were engaging with CBDCs in some way. Also, in October 2021, Nigeria became the first African nation to launch a CBDC, the e-Naira.
Elsewhere, China’s state-sponsored digital currency, the e-CNY, was being developed. And China’s Central Bank, the People’s Bank of China (PBoC), defined e-CNY as the fiat currency’s digital version.
Even the US currently has two CBDC projects underway. The Federal Reserve Bank of Boston is leading the first project and is partnering with the Massachusetts Institute of Technology. The Digital Dollar Foundation and Accenture champion the second.
The adoption of CBDCs by major global economies is because of the possibility of such digital currencies gaining prominence in cross-border payments.
Crypto Market Cap ATH of $3 trillion
November was a record-breaking month for crypto investors. BTC surged above $66,000, and ETH set an all-time high above $4700. Also, MANA skyrocketed, surging 261% as investors sought exposures to Metaverse-related investments following the rebranding of Facebook. And SOL continued its surge, overtaking ADA to become the fourth-largest cryptocurrency by market cap while setting an ATH of $258.93.
However, as the top digital assets by market cap rallied, the overall market cap also hit a new ATH as the $3 trillion hurdle was scaled for the first time.
As always, new ATHs raise questions of the external factors that favored them, yet no clear pictures emerged in this instance. Instead, most people attributed the new ATH to the generally positive market mood.
Tesla’s purchase of $1.5 billion worth of BTC
In January, Elon Musk’s car company, Tesla, revealed that it bought about $1.5B of BTC. It also expects to start accepting BTC as payment in the future.
In an SEC filing in January, Tesla said it’s updating its investment policy and wanted to invest in “reverse assets” like digital currencies, gold ETFs or gold bullions.
The news caused BTC price to surge 17% to $44,220, an ATH. Tesla stated that it was trying to maximize returns on cash that are not being used in the company’s day-to-day running.
The announcement comes days after Musk added “#bitcoin” to his Twitter page, skyrocketing prices. Although he took it down days later, he continued talking up BTC and other cryptos, including Dogecoin, which rose by 50% after his endorsement.
Ethereum’s Altair Upgrade
The Ethereum network, one of the world’s largest blockchain networks, took a significant step toward the highly-anticipated Ethereum with the Altair upgrade.
Ethereum 2.0 is the network’s transition from a Proof-of-Work (PoW) mechanism to a Proof-of-Stake (PoS) mechanism.
According to an Ethereum Foundation blog post, the Altair upgrade is a Beacon Chain update that adds support for light clients, pre-validator inactivity leak accounting, a rise in slashing severity, and clean-ups to validator rewards that allow for easier stated administration. This is the Beacon Chain’s first scheduled update.
The blog post further stated that the update is a “warm-up” for the Beacon Chain and its related clients. Essentially, the upgrade will add several major features and capabilities to the Ethereum 2.0 network.
Even though several experts believe cryptocurrencies to be highly speculative, we can’t argue that 2021 was a huge turning point for digital currencies. On the contrary, it was the year they went mainstream, expanding into both the financial system and framework and popular consciousness. We, therefore, look forward to the new year and eagerly anticipate what it has stored for the crypto market.