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Highlights
- From debut of Bitcoin ETFs to El Salvador’s decision to make Bitcoin a legal tender, Crypto market has seen significant developments in 2021.
- Metaverse, however, was in fact one of the most significant events of the year.
The year 2021 has been a significant year for the cryptocurrency market. It has seen varied emotions, uncharacteristic highs and lows, several new beginnings. But at the same time, it has also seen how speculative, or influencer driven can this market be and why despite all the highs it does pose several critical questions on how safe or unsafe are the crypto markets.
Let’s look at the 8 major events that made crypto market an interesting year.
- Bitcoin’s All-time High
In April, Bitcoin saw its first all-time high mark of US$64,804 ahead of the Coinbase’s stock listing on the NASDAQ. The listing also had an effect on Ethereum prices as well as it too witnessed a significant gain to US$2,317.
Later in October, Bitcoin superseded that mark to cross US$66,000. The rise came at the back of the Proshares Bitcoin Strategy ETF (BITO) debut on the NYSE. Such was its impact that the Bitcoin-related ETF registered itself as the second-most traded fund within minutes of the launch. On the opening day itself, approximately 29 million shares were traded, generating trading value of US$1.2 billion.
A month later, in November, Bitcoin reached its third all-time high mark of US$68,000. This was a significant rise, considering BTC at the start of the year was trading just under US$30,000.
- Musk’s romance with cryptos
Tesla CEO Elon Musk brought the crypto market to its knees with a single tweet wherein he said that company will not be accepting Bitcoin as a mode of payment. On 13 May, Musk tweeted this, following which BTC plummeted by 12% reducing the price to US$49,300. The likes of Ethereum and Cardano too registered significant losses that day.
Also read: Will Terra (LUNA) touch US$150 by 2022?
Such was the impact that by May 18, the Bitcoin’s prices had slumped to a low of US$30,000. The market remained in the bearish phase for more than five months before it showed signs of recovery in October
- Binance banned in UK
Leading crypto exchange Binance was banned by UK regulators from operations on 26 August. The Financial Conduct Authority's decision came amid the crackdown calls, which had been gaining momentum ever since the crypto market dropped in August.
In a notice, the FCA explained that even though the Binance Markets Limited, the UK division of Binance, will not be permitted to trade within the country, the scope of the ban was limited. It further clarified that the non-registered firms could work together and Binance can offer the services through its website.
- Calls on crypto regulations
Gary Gensler, chairman of US Securities and Exchange Commission, urged the Congress to allow the SEC to have more authority over crypto trading within US. Gensler said that there is a need for such a call to ensure that investors don’t lose their money and their rights are protected.
Also read: Why is Voxies (VOXEL) crypto surging today?
Gensler, terming the crypto market as ‘Wild West’, said that the crypto market is in fact open to market manipulation and millions of investors vulnerable to risks. He further added that it’s the duty to congressional authorities to bring in laws that would help them to stop fraudulent activities.
Senator Elizabeth Warren too agreed with Gensler stating there is an urgent need to regulate the market and called the SEC to take stringent measures to punish the companies, which tend to manipulate the market sentiments.
- Bitcoin as legal tender
El Salvador created history by becoming the first country to make bitcoin its legal tender on 7 September. With this decision, the businesses across the Central American nation had to accept Bitcoin as a mode of payment.
El Slavadorian President Nayib Bukele in a tweet had announced that the millions of people would have access to the government's new digital wallet app, Chivo, and upon downloading the app, it would give US$30 in Bitcoin to every citizen.
Also read: Dogecoin rallies on Tesla announcement: Can DOGE hit $1 by 2021?
The International Monetary Fund had, in fact, suggested that El Salvador accepting Bitcoins could bring in sever financial crisis to global monetary systems. However, President Bukele’s administration felt that its time that the country reduces its dependence on Dollar and create their own unique monetary system. The government had installed Bitcoin ATMs throughout the country where people can exchange the cryptocurrency for US dollars.
- China bans cryptocurrencies
In the same month, China officially condemned the use of all cryptocurrency-related transactions illegal. On 24 September, the People’s Bank of China (PBOC) announced that cryptos will no longer be considered as a part of the payment system and cryptos such as BTC, Ethereum etc. cannot be circulated in the market.
The impact was immediately felt with the crypto miners’ exodus, who wanted to close their operations and look for greener pastures where they can operate without government regulations. This had a deep impact on the market too as Bitcoin prices dropped to US$42,455.50, along with Ethers which dropped by 7.89% to US $2,859.91 on 24 September.
- Launch of Bitcoin ETFs
The debut of a crypto-based ETF was a hallmark event in the crypto space. The introduction of a Bitcoin ETF was as a watershed moment for the crypto industry. With the launch, the gap between traditional financial markets such as derivatives, ETFs, and stocks and the crypto markets was bridged.
The ETF launch showcased how a conventional financial institution could dip their hands in the digital asset pie. This resulted in BTC prices rising sky high immediately.
- Rise of Metaverse
Metaverse was undoubtedly one of the most significant game-changing events of 2021. It all started when Facebook decided to rebrand itself as Meta, it reignited the world of AI, VR, avatars, and all. Metaverse combines the world of multiple elements of technology. It gives the users a sneak peak of the parallel virtual universe on the Internet.
It’s a place where users can socialize, shop, play games, etc. not in the physical form, but in a virtual form. It transforms into a digital economy when the users can use it for transaction purposes such as buying, selling, or creating of items. Metaverse today, are more associated with avatars or one’s own creation and take it seamlessly. It’s mostly seen with the gamers which offer unique gaming experience along with opportunities to trade and do transactions in.
