Highlights from 2021: The Year of Crypto

It’s been a wild journey, but where are we at now? In this blog I’ll give you some predictions for the upcoming year in crypto.

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The “cryptocurrency trends 2021” are predictions for the year that is coming up. The cryptocurrency market and its future will be discussed in this article.

The year 2021 will be regarded as a year in which we triumphed against the odds. 

Traditional banking systems had failed us for decades, and we had lost faith in them. We couldn’t see it because we couldn’t see it. With the pandemic and the resulting breakdown of institutions, it is apparent that inflation is not “transitory,” and that government monetary policies are not designed to be financially stable instruments. 

The global financial crisis boosted the public’s interest in a fresh finding. It’s all about cryptography. Many people thought it was their choice to go. The blockchain world has been around for a long time, however most current users just discovered it around 2021.

The public’s interest in cryptocurrency exploded this year. Something that isn’t quantifiable. Some were just interested in making quick cash. There’s no question about that. However, they all shared the opinion that decentralization is the way forward and provides a much superior platform than most traditional organizations, which only serve to decay. 

We began several new paradigms as the business evolved and established itself as a multi-trillion dollar market. These paradigms were not restricted to any one market area. The rapid accumulation of talent, network infrastructure, and finance aided in the creation of some of the greatest protocols and decentralized platforms attempting to bring “Web3” to life. 

We may look to DeFi’s parabolic expansion from less than $18 billion in locked value to more over $245 billion to see how much innovation and financial inclusion we accomplished this year. We experienced several highs and lows along the process. Ups are the majority of the time. And in this crypto-verse, there have been numerous events that have either transformed the markets dramatically or introduced new types of blockchain technology. 

We’ll provide a variety of highlights in this year’s end report, ranging from nations banning and accepting cryptocurrency to new storylines reshaping old businesses. Read it all the way through. Some may have escaped your notice. 

Tesla, like other corporate treasuries, has a lot of cash. Purchase Bitcoin 

In some ways, the announcement by Tesla that they will accept bitcoin payments and add $1.5 billion in BTC to their treasury was a watershed moment for bitcoin. The market’s patterns and structure were quickly altered as a result of this news. We needed to take a fresh look at the situation. In a handful of days, the positive volatility was approximately 10%-20%, propelling BTC over $44,000. 

Highlights-from-2021-The-Year-of-Crypto

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It wasn’t simply Tesla that bought BTC. Many businesses began to see bitcoin as a store of value or to speculate on it. As a consequence, they purchased bitcoin valued hundreds of millions of dollars. MicroStrategy is a nice example. Michael Saylor’s business analytics firm has gone all-in on bitcoin. Currently, the corporation has about 122,478 bitcoins (BTC) with an average price of less than $30,000. This was only feasible because to Michael’s decision to raise funds via a convertible note that guarantees BTC would reach $58,000 by 2026. It seems to be a wonderful offer, doesn’t it? We were thinking the same thing.

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Square, Grayscale, and Meitu are among the noteworthy firms that have added BTC. Many more public firms have taken the plunge and profited handsomely in the last year. For the first quarter, it was pretty much the story. 

China’s Mining Crackdown

Two significant results have emerged from the 2021 chapter. One, China’s bitcoin business has taken a hit as a result of legal and environmental worries over local and industrial mining. 

The second result is beneficial to the whole cryptocurrency ecosystem. For several years, China accounted for more than 75% of the hash rate, implying that Chinese miners controlled or shared more of the bitcoin network. Profits were being made all throughout China. The miners were able to optimize their operations without compromising any bitcoin held in the treasury by using the seasonal rotation of renewable energy. 

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All of that changed when the Chinese government placed a blanket ban on cryptocurrency mining. The crypto world’s main power, China, was no longer present. The authorities shut down 90% of bitcoin mining operations, lowering the hash rate to an eight-month low. As a result, the miners have relocated to other areas such as the United States and Kazakhstan. After this hash rate distribution, I believe Borat’s native nation of Kazakhstan will emerge as one of the finest mining locations. You may learn why by reading the whole article. 

One of the most significant things we’ve seen this year is the distribution of bitcoin’s hash power. It provides miners with additional resources at lesser rates, as well as new areas with fewer restrictions. 

May 2021 will go down in history as the sixth-worst month in Bitcoin history. 

After China made repeated declarations outlawing all crypto activities, including mining and bank-provided services, we expected the markets to retaliate brutally. But we never expected the sell-off to result in an almost 40% drop. It dropped to $29k-$30k after reaching a new all-time high of $64,000. Some of the largest intraday liquidations in bitcoin history occurred during this period. To be precise, 4.8 billion. There was a one-trillion-dollar loss. That’s how horrible it was. 

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Tesla has chosen to discontinue taking bitcoin as payment, in addition to China’s hostile moves. This rubbed a lot of folks the wrong way. It was mostly due to the fact that the firm had achieved a profit of $100 million before to being sold. Elon Musk expressed his worry about the environmental concerns around bitcoin mining on Twitter. Despite the fact that he says he won’t be selling any more bitcoin, he hasn’t said if Tesla would take the cryptocurrency again. Without a doubt, the year 2021 saw a big market change. 

EIP-1559 was activated and $4.9 billion worth of ETH was burned. 

Ethereum (ETH) is expected to be one of the best performances in 2021. It’s not surprising. The price increase, however, was not the only highlight of Ethereum. The activation of the London hard fork marked yet another milestone. The EIP-1559 update, according to Vitalik Buterin, co-founder of Ethereum, demonstrates that the network can endure large modifications without any trade-offs. 

The update was critical because it prevented developers and consumers from gaining access to Ethereum networks and transacting. The MEV issue was getting out of hand, along with the hefty prices. Miners were generating huge surges in transaction costs by anticipating block production. The London hard fork implemented a basic charge structure that lowers gas costs and removes several entrance hurdles. 

The gas price dropped as low as $2 for a brief time. The reason for this was mostly due to a significant market downturn in the second and third quarters. However, as soon as the market rebounded and activity surged, the gas price skyrocketed. For Ethereum users, paying hundreds of dollars for a single transaction has become the norm. 

Despite the network difficulties, the price of ETH has risen to above $4,000. The key factor is the rate of burn. Every day, the new update was consuming hundreds of ETH. Although many feel this would have a deflationary impact, this is untrue, and the price has nevertheless risen to new highs. The burn rate is now at 8TH per minute, implying that almost $40,000 worth of ETH being burnt every minute, since the market is in a decline. 

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Etherscan.org is the source of this information.

El Salvador is the first country to legalize bitcoin as a form of payment. 

This one will go down in history. When a nation embraces a digital asset like bitcoin and the president continues to purchase dips, you have to acknowledge and congratulate their efforts to improve the financial well-being of their inhabitants. El Salvador, a nation with a population of fewer than 7 million people and a per capita income of $4400, became the first country to recognize bitcoin as legal cash. 

The president of Nayib Bukele is so enthusiastic about bitcoin that he actively engages in discussions with industry leaders and continues to accumulate additional BTC. He also promised businesses striving to improve the nation using bitcoin and cryptocurrency automatic residence. He vowed to develop a geothermal power firm that utilizes 100 percent clean energy to mine bitcoin to help miners and highlight the country’s enormous renewable resources. 

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Volcanoes Provide Geothermal Energy (Source- Twitter) 

El Salvador in 2022 will be intriguing to monitor since it may be a long time before another nation adopts bitcoin as legal cash. The true effect on the economy will be evident, and the government’s ability to promote financial inclusion will be shown to the rest of the globe. 

The greatest 2021 revelation was NFTs. 

The NFT frenzy is the one thing that jumps out for me out of everything that transpired this year. What began as a simple trend of digitally exchanging sports cards and art artifacts has evolved into a market-wide craze. 

Non-fungible tokens (NFTs) demonstrated actual ownership and the impact of scarcity on an asset’s value. All of this was made feasible by the underlying technology. This burgeoning sector piqued the attention of artists, singers, entertainers, sports heroes, and worldwide businesspeople. The NFT industry alone had over $17 billion in trade activity in 2021. By contrast, it will be less than $400 million in 2020. 

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Sales totals in 2021 (Source- nonfungible.com)

There were a few collections that took everyone off guard. Bored Ape Yacht Club is a club for bored apes., Cool Cats, Mutant Ape Yacht Club, Cyber Kongz, Robotos, Fidenza, Neo Tokyo, Doodles, Creature World, and Clone X are only a few of them. It’s crucial to recall how some of them, like BAYC, got their start. This one collection kicked off the PFP NFT trend, which many others have since followed, imitated, and utilized as inspiration for fantastic projects with amazing communities. This year, Bored Apes created a lot of billionaires after jumping from an average price of $3,000 to $300,000. 

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Bored Ape Yacht Club 

In the crypto realm, NFTs are no longer a niche market trend or sector. NFTs have long-term value for big brands like Adidas and Nike. It’s mostly due to the fact that the use-cases are endless. As more projects roll out utility features and fulfill roadmap commitments to their holders, we’ll certainly see more adoption in the next year. 

Metaverses & Play-to-Earn games 

Before you get into any blockchain-based game or metaverse project, I strongly advise you to watch Ready Player One. Have faith in me. You’ll have a lot easier time understanding the notion of play-to-earn. 

When the market was down, a few of projects were mooning in ways no one could have predicted. Axie Infinity was one of them. Every day in June, this pet-themed computer game raked in more than $30 million in revenue. Furthermore, they reached roughly a million active users who were either playing the game or purchasing new NFTs on the Axie marketplace. 

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In Q3, the game’s dual token economy beat several Defi ventures. This sparked the development of a slew of other games based on the same idea, allowing talented players to earn money. The startup has also received significant money from large venture capital companies, bringing blockchain gaming closer to the mainstream. 

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Metaverse Sandbox 

At the same time, metaverse initiatives were picking up steam. We’re all aware of the circumstances. The rebranding of Facebook brought attention to the notion of a metaverse and the fact that there were already numerous operational virtual worlds such as Sandbox and Decentraland. In less than two months, the native tokens of these top projects generated a 10x return. The following is a list of the most popular metaverse tokens in 2021.  

The list of 2021’s highlights is endless. A few key ones, such as rising capital-efficient models using Magic Internet Money and OHM forks, have escaped my notice. The rise of DAOs is also noteworthy. Overall, 2018 has been a good year for cryptocurrency. In terms of adoption and innovation, we’ve come a long way. You are incorrect, my friend, if you believe you are late for the celebration. We have just just begun. In 2022, we’ll meet again. Have a wonderful new year and be safe. 

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Karthikeya Gutta, a crypto writer and freelance contributor for ItsBlockchain, was born and raised in India. With in-depth analysis and research, he covers many facets of the sector. His enthusiasm for blockchain and the crypto ecosystem stems from his belief that it has the potential to transform the world and benefit millions of people.

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The “best cryptocurrency to invest in india 2021” is a topic that will be covered extensively in the next year. The article highlights some of the things that are expected to happen and what you can expect from cryptocurrencies.

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