2021 has been an important year for cryptocurrencies. The decade-old technology has caught the attention of investors and regulators and has managed to become part of the mainstream.
According to crypto.com, the number of people holding cryptocurrencies around the world has doubled to around 220 million this year. Investors invested around $ 30 billion in the crypto industry in 2021, more than all previous years combined, according to reports. From digital collectibles to crypto games, the industry has secured multi-billion dollar investments.
The largest cryptocurrency bitcoin has made significant strides in its journey to be accepted by the mainstream financial system. The old coin hit record highs of nearly $ 69,000, taking the cryptocurrency’s total market cap to new highs of nearly $ 3 trillion, after starting the year at around $ 29,000. .
The first bitcoin exchange-traded fund (ETF) started trading, attracting good institutional interest. Many mainstream banks like Goldman Sachs have also announced plans to launch products that will allow bitcoin to be used as collateral to provide cash loans to institutions.
Another big milestone for bitcoin this year has been its acceptance as legal tender in El Salvador. Citizens of the island nation can now buy or sell products and services using bitcoin as their currency.
Some new uses of crypto technology have also made headlines this year. Non-fungible or NFT tokens were introduced to provide a unique property to digital art and music. But during the year, NFTs expanded to other types of digital property, including digital real estate. The ease of creating an NFT in a dedicated market has given independent artists a platform to showcase their art. NFTs have also become an extremely popular investment vehicle in the crypto industry, with sales of these digital assets setting new records at major auction houses. A plot of land on the Sandbox gaming platform, for example, was recently sold for almost $ 4.3 million.
âWith the explosive growth of NFTs this year, I think we are now heading towards a much wider adoption of cryptocurrency, blockchain and related technology. We are seeing Fortune 500 companies courting the NFT industry, of financial and credit institutions adopt DeFi; and retail investors are entering the crypto market en masse. Current reports indicate that nearly 20% of the United States is invested in cryptocurrency in some way. Another. We’re still ahead, but we’re on the precipice of mass adoption, âMarc Seal, CEO of Sortium, the company that develops CryptoGene, told Cointelegraph a web 3.0 game to play to win.
NFT’s sales recently totaled around $ 14.1 billion over the past year, down from just $ 65 million the year before, a Wall Street Journal article noted citing data from nonfungible.com.
The decentralized finance (DeFi) space was another aspect of the cryptocurrency market that gained a lot of attention in 2021. DeFi essentially involves cryptocurrency lending and borrowing services. DeFi offers the ability to create decentralized systems that leverage distributed ledger technology to facilitate peer-to-peer lending without the need for traditional intermediaries or third parties like banks. Reports suggest that investments in DeFI projects, such as decentralized exchanges (DEX) and lending or borrowing platforms, have reached nearly $ 100 billion now, up from around $ 25 billion at the start of the year. year.
The total amount of money on DeFi platforms, a figure known as the locked-in total value, has risen to $ 259 billion from $ 19 billion at the start of the year, the WSJ article noted citing data from the DeFi Llama website.
Many countries and government agencies have started to facilitate decentralized finance in the traditional system. The European Council, the body that sets the political priorities of the European Union, has announced its position on the crypto asset markets framework, which will provide increased regulatory clarity on crypto and DeFi assets.
Altcoins have also become a serious competition for bitcoin this year. The market capitalization of many altcoins like Ethereum, Solana, and Tether has increased dramatically in a year. At last count, Ethereum’s market cap was around $ 400 billion, but that is expected to rise as it plans technology upgrades.
While data to date suggests that mass adoption of cryptocurrencies may have started, this is still the subject of debate. But as Tim Draper, co-founder of early stage investment firm Draper Fisher Jurvetson, pointed out to Cointelegraph, âI think anyone with a young brain already has a portfolio. The rest will follow. The same will happen. ‘has occurred with the adoption of the Internet. “
(Edited by : Jomy Jos Pullokaran)
First publication: STI