For many, 2021 was the year where crypto really became a household name – it’s no longer just Bitcoin and Ethereum that are used, but a whole host of different types of coins or tokens that provide investment opportunities for individuals and institutions alike. Of course, 2021 also saw crypto advance beyond just the basics of the currencies in the past year – you’ve likely seen reference to NFTs and Metaverses in recent times, which are huge new advancements within the industry, but something that fewer people are as familiar with these at this stage. In this 2021 crypto review, we’re going to take a look at the biggest moments in crypto from the past year, what these events may tell us about the future of the industry, and why there has never been a better time to take the next step on your digital asset journey.
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Why was 2021 Such a Big Year for the Crypto Industry
By all definitions of the word, 2021 was a crazy year. Every aspect of our lives was flipped upside down, driving us to find new ways to operate, succeed, and prosper during difficult times. As many will already know, the digital revolution was massively accelerated as a result of this, with more people working in digital mediums than ever before. Of course, with new digital problems arising, it’s natural for more digital solutions to surface. Interestingly, cryptocurrencies have found a major place as part of this digital revolution, with many businesses across a wide variety of industries now looking to accept most major digital currencies as funds for purchasing goods or services.
One of the key factors in the fantastic year that the crypto industry has seen is the adoption of crypto and the development of accompanying technology that enables more seamless use for digital currencies. In terms of adoption, the biggest example of the rapid expansion seen in 2021 is in El Salvador, where it was announced that Bitcoin would become legal tender, making it an accepted currency by law in all establishments within the country. This is the first time we have seen this for a cryptocurrency, but this may well be a sign of things to come in other countries too, with other nations also rumoured to be considering digital currencies as a form of legal tender. El Salvador’s decision was set in law in September 2021.
On the topic of technology, one of the biggest upgrades to the crypto markets has been a protocol named Taproot. In simple terms, Taproot is a bundle of upgrades featuring three major upgrades that improve privacy, scalability, and security. For many, Taproot is seen as the biggest upgrade that the Bitcoin network has undergone since the Segregated Witness upgrade of 2017, which focused on enhancements for block capacity and improving security. With the introduction of Taproot, Bitcoin again made it very clear that it is a technology that will be able to change, adapt, and improve continuously over time to suit the needs of the user, both in terms of functionality and user experience.
2021 has also, to a degree, been the year where Bitcoin has seen real competition at the top of the crypto food chain. In 2020, Bitcoin has a market share of a staggering 70.2%, which shows major domination over this field. Fast forward to 2021 and this market share now stands at just 40.1% – this 30% drop in market share, along with Bitcoin’s continued value increases over this time, goes to show the true power that this industry is building, diversifying into multiple major currencies that create a more stable market with reduced investment risk. One of the key reasons that this share has dropped over the past year is due to the number of new projects that have entirely different use cases to that of Bitcoin, for example in NFTs or as part of a metaverse. Metaverses tend to either operate off of the ETH blockchain or have their own native cryptocurrency that must be utilised, so in order to engage with that specific digital world, you’ll need to diversify your crypto holding further and engage with brand new assets that you may not have ever considered before.
The Most Important Cryptocurrencies This Year
As you’d expect, Bitcoin once again had a huge year of development, seeing value rise massively despite losing quite a large amount of the overall market share. If you’re a Bitcoin investor, we don’t think you should be too worried about this – with more people looking to invest in the industry, on the whole, we’d still expect to see Bitcoin’s value rise and rise over the coming months and years. Here’s what our 2021 crypto review learned about Bitcoin.
29th January 2021 – a large rise in value at Elon Musk adds #bitcoin to his biography section on Twitter,
22nd February 2021 – a huge drop in value, wiping £7,120 off of the token price, caused by the US Treasury Secretary’s statement calling the coin “highly speculative” and “inefficient” for transactions,
13th May 2021- another large drop in value as Tesla announces that they will no longer accept Bitcoin as payment for their vehicles due to concerns over the mining process,
21st July 2021- Tesla announces that they will be accepting Bitcoin as payment once again, causing the value to rise.
15th May 2021 fall – The price dropped dramatically as Elon says he is worried about BTC environmental impacts sending the price of DOGE downwards and an appearance from Musk on NBC’s “Saturday Night Live” Musk called Doge a hustle plummeting the price even more.
21st June 2021 fall – A Redditor by the name of Dogefather tries to pump and dump the prices causing everyone to panic and sell resulting in the opposite effect and crashing out.