Even though Bitcoin ended up last year with disappointing price action, there are reasons to assume that 2021 has still been its best year in history.
In this article, we will share the most important events that will most probably shape the future of the whole crypto industry for years to come.
Despite an exceptional amount of FUD (fear, uncertainty and doubt) we had to deal with (in the form of so well known Chinese, Indian and environmental issues), the crypto industry grew like never before, and we finally started experiencing signs of adoption speeding up. 2021 has been great for many different blockchain projects but it wouldn’t be so if not for the king itself.
Bitcoin has seen some very important developments this year. Our team at Krypto.Army had some troubles with agreeing on the one and most important event of 2021 for Bitcoin. After days of deliberation, we decided to give the number one most important event to:
El Salvador adopting Bitcoin as the legal tender.
This move has been the biggest monetary experiment up to date and will probably determine the fate of Bitcoin as a proper currency. We have already seen millions of people from Venezuela, Argentina, Turkey and Lebanon flocking to Bitcoin as their national currencies deteriorate but a country establishing BTC as a legal tender is an unprecedented event. If the “Land of Volcanoes” succeeds it will serve as an example for others to follow. Its failure, on the other hand, will certainly be used by the establishment to further demonize Bitcoin. Since establishing Bitcoin as its legal tender, El Salvador bought every dip and the new Bitcoin star Nayib Bukele (president of the country) even used his Twitter account to call out the FED for constant money printing. I am biting my nails following this story as it unfolds. Its final will shape our future, so let’s keep our fingers crossed for the king of crypto!
The other event with huge significance for Bitcoin has been China banning the mining of the first cryptocurrency. From controlling two-thirds of Bitcoin mining in April to not contributing at all as of July, China has lost control over the industry in 2021. Just within a few weeks, Bitcoin’s hashrate dropped almost 50%. Even though this has been considered a negative event in the short term, in the long term moving the mining industry from China is very positive news for Bitcoin and the whole crypto space. What is more, the hash rate fully recuperated and climbed to new highs before the end of 2021 as miners swiftly moved to other parts of the world (mostly to the US and Kazakhstan).
Chinese ban fears were, as always, one of the major forces pushing the market down. In 2021 the FUD and market manipulation were taken to another level. To many people’s dismay, at some point the FUD campaign was led by the previous industry’s hero Elon Musk, who after first announcing that his Tesla owns bitcoin and will accept it as payment, later unexpectedly changed his mind quoting the environmental issues. We can only hope that as the crypto market capitalisation grows and the dominance of Bitcoin falls these manipulations (that are mainly affecting the newcomers) will have less of an impact. Bitcoin has been created to give people power over their money, let’s not let the FUD take it away from us.
Even though many government officials and bankers continued to demonize Bitcoin in 2021, we experienced the initial wave of institutional investment, led by famous Bitcoin proponent Michael Saylor. Microstrategy’s CEO was the first to publicly announce his support for BTC, opening the floodgate of institutional investment. He was followed by many renowned companies and investors, including none other than Ray Dalio and Mike Novogratz. According to https://bitcointreasuries.net/, at the time of writing, officially over 7% of Bitcoin is owned by publicly traded companies, legal entities and nations. Let’s add to it another 8% held by crypto exchanges and we have over 15% of the total Bitcoin’s supply already in hands of the big guys (officially…).
Another important event on our list has been the launch of the Bitcoin ETFs. The first of them (done by ProShares) was launched on October 19 and later followed by VanEck Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF. All of these financial tools use the futures market to track the price, we’re still waiting for an ETF that will be based on the spot price. Most probably we will see one approved in 2022, right SEC Commissionaires? 😉
This article wouldn’t be complete without mentioning all the important technological upgrades that bitcoin went through in 2021. The development of the lightning network (LN) finally sped up, as we experienced the usage rate jumping over 600%. Bitcoin transactions also got way cheaper because of LN. An average transaction on Lightning Network now costs way less than 1 cent.
With all these really great events regarding BTC, the world of cryptocurrencies in 2021 has been so much more than just Bitcoin. We saw the rise of NFTs, DeFi 2.0 and Metaverse related cryptos as well as some crazy gains of meme (and not-so-meme) coins. The whole ecosystem grew like never before and we don’t think this growth will slow down anytime soon.
We will shortly post some more articles to also cover these other events that shaped the crypto space in 2021.