The end of 2021 is drawing near. As we wrap up the year, we figured it’s timely to look back at the cryptocurrency developments for the past year, which has undoubtedly seen a growing interest.
In fact, 2021 was a wild year for crypto. With many events happening in the crypto space, could this year possibly be the tipping point for cryptocurrencies?
Let’s start with the key statistics for 2021. Firstly, there was a rising search trend for crypto.
According to the top Google searches in the news category, “Dogecoin” and “Ethereum Price” were listed as the top 10 searches.
Elon Musk’s tweets on Dogecoin also had a role to play in this surge in interest for the “meme coin”. This means that more beginners are starting to get interested in cryptocurrencies.
Cryptocurrency is also a popular topic on Reddit, with about 6.6 million mentions on the website this year.
Secondly, Bitcoin’s pricing witnessed an all-time high in 2021.
In 2020, Bitcoin broke US$20,000 and had an all-time high of almost US$30,000. This year, Bitcoin surpassed expectations and had an all-time-high price of close to US$70,000.
Can Bitcoin pass the US$70,000 barrier next year? With the exponential growth of Bitcoin and its adoption, it is definitely exciting to observe the prices in 2022.
Now, let’s look back at the iconic moments throughout the year.
1. The year started with an NFT boom
In January, we started the year with a trending topic that would last the entire year: non-fungible tokens (NFTs).
NFTs are digital tokens that represent something unique and linked to the blockchain. NFTs have value as they are able to prove the authenticity of digital or physical items. Most importantly, the NFT cannot be altered or replicated.
The most expensive NFT in 2021 was Everydays By Beeple, which was sold for almost 40,000 Ether (equivalent to almost US$69 million).
Gaming with NFTs has also gained traction in 2021, and the best example is Axie Infinity.
Axie Infinity is an NFT-based game inspired by Pokemon and Tamagotchi. You can play-to-earn by trading, battling or even breeding new adorable characters called Axies. Each Axie is unique and represented by NFTs.
To play the game, players need to assemble a team of three unique Axies to take part in battles. These Axies can be bought on the Axie Marketplace with Ethereum (ETH).
As of October 2021, there were over two million monthly active users using the game, which led to an impressive 953 per cent monthly volume growth. Furthermore, the price of the AXS token skyrocketed in 2021, from US$6 at the end of June, to an all-time high of US$150 in November 2021.
The game is so profitable that some players are able to make more than an average worker’s wage in their country by playing the game.
NFTs are mainly used in the art and gaming scene. Recently, NFT characters are also making rounds on the internet. Have you seen these pixelated cartoon characters as profile pictures on social media?
For example, there are only 10,000 Bored Ape NFTs in circulation and no more of such NFTs are made on the blockchain. One of the rare Bored Ape Yacht Club NFT was even sold for US$3.4 million.
Usually, these NFTs are hosted on Ethereum networks. This means that you have to buy an Ethereum token (ETH) – which can be bought from a platform like Luno – to purchase NFTs on marketplaces like Opensea or Mintable.
2. “I’m in” – More companies start to adopt crypto
With more attention dedicated to cryptocurrencies, companies are taking it more seriously. There are many ways that companies were involved.
For one, Tesla and Square both hold reserves in Bitcoin. Tesla announced in February that it bought US$1.5 billion worth of Bitcoin, holding them as reserves. Shortly after that, Square also bought US$170 million worth of Bitcoin as reserves.
This is a breakthrough as it shows institutions and individuals that Bitcoin can be a form of reserve asset, similar to gold. Bitcoin is commonly known as digital gold, as it has a limited supply and it is impossible to counterfeit.
Additionally, Adidas and Nike have joined the metaverse sneaker wars.
Adidas collaborated with Bored Ape Yacht Club for their “Into The Metaverse” project, allowing fans to buy limited edition Adidas merchandise as an NFT. Nike has also bought a company that makes virtual shoes and sneakers.
This might seem bizarre – afterall, why would we even need virtual shoes? Like a pair of Nike shoes in the real world, the limited edition shoes are a status symbol and a way to stand out from the crowd.
As more companies move towards the metaverse in the near future, these brands are making a move to establish themselves in the space.
3. Countries are getting involved with cryptocurrencies too
As we see more companies adopting cryptocurrencies, countries also want a slice of the action.
Of course, we cannot miss out on one of the biggest news of the year: El Salvador and its Bitcoin adoption.
In September, the government of El Salvador sent shockwaves throughout the world when they announced that they now accept Bitcoin as their national currency, making it the first-ever country to adopt Bitcoin as legal tender.
The opinions on this move were divided. On one hand, the price of Bitcoin fluctuates more than normal fiat currency, which makes it risky to buy daily groceries with Bitcoin.
On the other hand, we can see how it is possible to adopt Bitcoin as a payment system and national currency.
4. Development of Central Bank Digital Currencies (CBDC)
Talking about national currencies, we have to also mention the CBDCs. CBDC is a digital currency that is run on the blockchain developed by central banks.
Although there is one currency that dominates the industry, the most notable project is the Digital Yuan in China. The central bank of China already had trials in several cities like Shanghai.
Since most Chinese are already using e-payment on a daily basis, the transit to a CBDC would be an interesting one.
2021 has been a busy year for crypto
The search results have proved that there has been a growing attention on cryptocurrencies. Companies have started to use Bitcoin as a reserve, and countries are also experimenting with Bitcoin and other cryptocurrencies.
As consumers, governments and companies are all getting more involved in cryptocurrency this year, we might be witnessing the tipping point for cryptocurrency adoption in 2021.
It is clear that cryptocurrency will play a significant role in the coming years through the massive levels of adoption across all areas. As such, now’s the best time to learn some of the basics and get yourself started on crypto.
If you want to learn about crypto but don’t know how exactly to go about it, Luno has a beginner-friendly learning portal where you can get all your crypto 101 questions answered.
You can learn about the origins of Bitcoins, and the differences between Bitcoin and Ethereum through bite-sized videos. You can also learn about Bitcoin and other major coins through Luno’s education portal.
To get started, simply create an account with Luno, which offers free and fast deposits so you can quickly get your hands on some Bitcoins.
You can buy Bitcoins at a low transaction fee of 0.75% and earn up to 4% interest on your BTC and ETH on the Luno savings wallet. To understand more about how to easily buy and invest in crypto, check out this guide here.
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