Blockchain News

Crypto Review 2021 | Blockchain News

Written by James Smith

The Covid-19 pandemic with Delta and Omicron variants still continues hitting the trading market, bringing uncertainty through the whole year. In addition, the trading market of cryptocurrencies has also been experiencing a high volatility journey within these twelve months. Before the end of 2021, this feature lets readers go through key milestones and events reviews.

Bitcoin breaks the All-Time-High

Investors might acknowledge the presence of volatility among various tokens trading this year. Still, the fluctuation also pushed major cryptos to an all-time high, breaking serval records for the first time.

The price of Bitcoin reached the all-time-high (ATH) of $68.789K on Nov. 10 at the time of writing, according to the data provided by CoinMarketCap. Experts indicated that there were serval bullish factors before the Proshares Bitcoin ETF, pushing the price to the relative ATH.

Bitcoin Future ETF approved

In October, the first Bitcoin future ETF- ProShares was finally started trading on the New York Stock Exchange (NYSE) after a lengthy waiting approval of Bitcoin future ETF from the U.S. Securities and Exchange Commission (SEC), followed by VanEck’s bitcoin future ETF on Chicago Board Options Exchange in November.

Thanks to SEC new Chairmen Gary Gensler’s pro-crypto stance, The bullish sentiment continued for serval weeks before the recent drop in December. The market expects more Bitcoin future-related derivatives financial products, even bitcoin-linked ETF products, to roll out under Gensler’s leadership.

El Salvador firstly adopts Bitcoin for legal tender

Favourable news not only came from ProShares Bitcoin future ETF, but the industry also embraced a new era of cryptocurrency, when emerging economies like the Central American nation El Salvador, approved by the congress and became the first country world in June, followed by adopting Bitcoin as fiat money along with the U.S. dollar as the first country worldwide since September.

President Nayib Bukele’s administration even distributed money by airdropping Bitcoins to raise awareness and increase cryptocurrency adoption, encouraging the public to use the crypto wallet- Chivo. Besides, the administration speeded up the rollout by installing over a hundred crypto ATMs, aiming to build the first Bitcoin City, for instance, using the profit from the crypto to build new schools.

In terms of strategy, Nayib Bukele implemented “buying from the dip”. El Salvador has accumulated over 1,390 Bitcoins so far, according to the latest official data.

Bukele emphasised the benefit of adopting Bitcoin that help overseas workers save transactions fees for remittance. In addition, the process of crypto mining would be environmental-friendly enough, supported by volcanic-generated electricity.

Yet, many citizens have still doubted the sustainability of crypto adoption; even international financial institutions, like the IMF, warned of the instability of Bitcoin adoption in the country. More and more firms, like Starbucks and McDonald’s, were accepting Bitcoin as the payment method in this country.

CBDC development

This year, the development of central bank digital currency (CBDC) also pursued a significant milestone. In October, Nigeria has rolled out its e-Naria and became the first African country by adopting CBDC. President Buhari believed e-Naria would help the country boost the economy’s growth and GDP by $29 billion over the next decade.

In Asia, as the Beijing Winter Olympic is approaching in next Feb. China intends to escalate the influence of e-CNY or digital yuan. In November, the central bank of China- PBoC announced that the number of e-CNY wallet registration had reached 140 million, which has risen six times more over the past four months. Reportedly, Chinese authorities actively requested more enterprises to accept its digital currency, such as McDonald.

China enlarges crackdowns over crypto mining

Prior to reaching the ATH of BTC, the primary token slumped to the relative lowest point this year at $29.807K on Jul. 20. The price was subject to a series of sentiments of “fear, uncertainty and doubt” (FUD) and the performance of bear sentiment among foreign oppression among regulators worldwide.

In June, the Chinese Communist Party-led government continued a series of legal actions against crypto mining activities. Reportedly, more than 90% of crypto mining capacity has been shut down after serval major mining facilities in China has been disconnected without electricity provision. These actions were described as a crackdown against the crypto sector. The legal actions forced the hash rate in China to drop significantly, resulting in an exodus of Chinese crypto miners emigrating to overseas countries, such as Kazakhstan, the U.S. or Russia.  

The crackdown continued throughout the year, including baring crypto as payment tools. The Chinese central bank called all crypto-related transactions illegal that unable to enjoy the same legal status as legal tender. Serval crypto data platforms were also unable to access to the Chinese market, including CoinMarketCap, CoinGecko and TradingView.

Yet, the general hashrate of Bitcoin seems returned normal and recovered by even hitting an all-time high in December.

“Person of the year”: Elon Musk

Intensified oppressions against the crypto activities among regulators was not the only factor affecting the crypto market; individual influence also escalated the uncertainty of cryptos’ fluctuation.

In December, Time magazine has named Elon Musk “Person of the Year”. Musk’s multiple identities include the CEO of Tesla, Chief Engineer of SpaceX, strengthening his influence as an opinion leader across various sectors and industries.

In addition, his soft power also reflects the crypto sector as an opinion leader. As a big fan of Bitcoin and Dogecoin, Musk offered an option for customers to purchase Tesla by accepting Bitcoin and considering adding Dogecoin. However, Musk decided to stop this plan through Tesla later due to environmental concerns during crypto mining. His swinging stance towards crypto payment resulted in massive criticism and being blamed by the public, followed by the slump of Bitcoin’s price.  

Nevertheless, Musk also urged the U.S. government not to be involved in regulating crypto. Subject to the influence of Musk’s speech, the price of Bitcoin has slumped to the relative low point at $29.8K on Jul. 20, according to CoinMarketCap.

Source: Bloomberg

Tightening regulations over crypto exchanges

Despite the crackdowns over crypto miners, crypto exchanges were also suffering from suppression by financial regulators worldwide. Zhao Chnagpeng-led crypto trading platform Binance was one of the exchanges targeted by global financial regulators, including the UK, Netherland, Singapore etc. These moves forced C.Z. to express his willingness to step down as the CEO. A few months later, the crypto exchange platform hired more senior management to strengthen its legal power to meet compliance obligations.

Metaverse, a new stage of future

On the other hand, In October, Meta (initially called Facebook) brought a new concept of the combination of technology and the future of the metaverse. In December, the social media giant further announced that the company lifted the banning policy of crypto advertisement.

The metaverse primary refers to the concept of virtual space that enables users access to virtual reality, “augmented reality and other technologies,” according to the introduction of the New York Post.

Serval key enterprises in the industry sector look up to Meta for further innovation and development, including Grayscale and Morgan Stanley. On the contrary, Elon Musk did not convince the benefit of the metaverse; he said, “I don’t see someone strapping a frigging screen to their face all day and not wanting to ever leave,” Musk also criticised that Web3 would be “more like marketing than reality.”


In 2021, non-fungible Tokens have drawn lots of public attention. The most eye-catching and the biggest amount NFT so far came from an auction of Beeple’s “Everydays: the First 5,000 days” in March, sold for an eye-popping $69.3 million. The auction has pursued a new wave of innovations across various sectors, like politics, academics, also promoted by enterprises and sponsorships.

In addition, many well-known opinion leaders, including Andy Murray, U.S. filmmaker Kevin Smith participated in the NFT market. Stakeholders of NFTs expect the market would be much more active in the coming year.   

Outlook ahead 2022

Stepping forward into 2022, Huong Hauduc, General Counsel, digital asset prime brokerage and exchange BEQUANT, believes the stance of China and the U.S. will still influence the crypto market development mostly, he said:

“China’s actions, whether this is continuing to crack down on crypto or loosening its grip on the digital assets space, will be a key indicator for future regulation across the world. The U.S. appears to be moving at a federal level, with mayors accepting salaries in Bitcoin and miners taking advantage of cheaper energy, but it remains to be seen if they take the bold actions of its allies in South America and see Bitcoin or other coins, such as Tether, as legal tender.”

On the other hand, Hauduc suggests “the voice calling for crypto regulation, whether it be for tighter consumer protection or just clarity of the rules for institutions, are getting much louder.”

Over the past 12 months, experts have observed that “institutions signal a change in their preferences and start favouring digital assets over gold as a reserve asset,” Loukas Lagoudis, Executive Director at crypto/digital assets hedge fund ARK36, comments. To compare with specific crypto coins, Ethereum is expected to “continue to gain ground against Bitcoin, at least in the medium term, as its importance for institutional investors will continue to grow,” Lagoudis added.

It is projected that “the sustained adoption of digital assets by institutional investors and their further integration into the legacy financial systems will be the main drivers of growth of the crypto space in the next year,” Lagoudis said.

Image source: Shutterstock

Source link

About the author

James Smith

Leave a Comment