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Highlights and Key Events of a Record Year for Cryptocurrencies

Cryptocurrency Jan 04, 2022 05:00AM ET
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By Roy Katsiri - 2021 was a great year for the cryptocurrency market, which reached historic highs. Despite the negative trend in the market in the last two months of the year, most participants in the market, both investors and traders, as well the companies and platforms operating in it, can conclude the year with many good reasons for optimism. 

As always, in the past year cryptocurrencies had a volatile run, and so in the last two months many of the leading cryptocurrencies dropped 30% or more. On the whole though, 2021 delivered positive returns in the crypto market for investors and traders, including hitting all-time highs in November. 

Bitcoin, the first and largest cryptocurrency in the market, is celebrating not only a new year, but also a Bar Mitzvah: Monday, January 3, marks the 13th anniversary of the creation of the first block ("Genesis Block") in Bitcoin's blockchain, which registered the first 50 Bitcoin coins. 

Key Events for the Crypto Market

Quite a few events created drama in the crypto market last year, including prominently: 

In February 2021, electric vehicle manufacturer Tesla, led by CEO Elon Musk, announced that it invested $ 1.5 billion in buying Bitcoin, making it the first major company on Wall Street to make such a large investment in cryptocurrencies. 

In March, a record for the most expensive NFT (non-fungible token) transaction ever: ownership of a collage of 5,000 digital works by American artist Mike Winkelmann, known as Beeple. The NFT sold for more than $69 million at Christie's Auction House. The collage, called "Everydays: the First 5,000 Days", has become one of the three most expensive works of any form of art sold by a living artist at an auction. 

Last April, the American company Coinbase (NASDAQ:COIN) became the first crypto exchange to be traded on Wall Street, with its shares listed on the Nasdaq via a direct listing, closing the first day at a market value of $85 billion. This move made Coinbase the largest public crypto company in the world. The company ended the year down 23% though, still with an enterprise value of $51.7B. 

Dogecoin, a cryptocurrency launched in 2013 as a joke about Bitcoin, broke its all-time record in May, with its price completing a jump of more than 12,000% since the beginning of the year. Dogecoin's rally was mainly attributed to Elon Musk’s demonstrated support of the currency, who announced in May that Dogecoin would be used to fund SpaceX's space mission, which would launch the Doge-1 satellite to the moon in early 2022. In the second half of the year, however, Dogecoin fell, until it closed the year at $0.17, still 3,650% higher than its price at the beginning of the year. 

In September, the Chinese government announced that any activity of trading or mining cryptocurrencies in the country would be considered illegal, a grave threat for the industry.

In October, on the other hand, the crypto market received significant support from US regulators, when trading was launched on Wall Street in ProShares' BITO basket fund based on Bitcoin futures. 

A few weeks later, on November 10, the price of Bitcoin soared to an all-time high, pulling along almost the entire crypto market in its wake. 

Key Stats for the Crypto Market in 2021

So after all these events, in the end, what made 2021 an unforgettable year for the crypto market? Here are some of the highlights, broken out in numbers, to illustrate:

$2.18 trillion - At the end of the year, this was the total value of the crypto currency market, which numbers 16,238 digital currency types (and that number is only going to keep rising), according to data from the CoinMarketCap website. The market started 2021 with a total value of about $760 billion, so the industry nearly tripled with growth of about 187%. The year-end total value is 27% below the record high of $3 trillion seen on November 10th. Bitcoin accounted for about 40% of that year-end value.

$68,789 - The all-time record price of Bitcoin, set on November 10, 2021. Since that peak, in less than two months, the price of the leading crypto currency fell 29%, and ended the year at a level of about $46,300. And yet, even after falling from the peak, the current price of Bitcoin is about 60% higher than it was at the beginning of 2021. The total market value of Bitcoin at the end of the year was around $876 billion.

$4,891 - The all-time record price of Ether, the currency of the blockchain platform Etherum, set on November 16th. Since that peak, Ether's price has dropped about 25%. Although far from its peak, Ether's price at the end of December was about 400% higher than it was at the beginning of 2021. The price of the currency at the end of the year reflected a $438 billion market value for the Ethereum platform - about 20% of the total crypto market value. 

$15.3 billion - The estimated annual revenue volume of all Bitcoin miners. The source of the data is a study recently published by the American website The Block, which estimates that the total revenue of Bitcoin miners has increased in the past year by 206% compared to revenues in 2020. This estimate is based on the assumption that mining companies sell the cryptocurrencies they mine and convert Bitcoin into fiat currencies to finance their current expenses. However, there are also miners who prefer to hold the coins they mine. 

$25.1 billion - The estimated volume of capital raises in 2021 for the global crypto industry. According to The Block's report, this sum represents more than 1,700 venture capital raises completed in the past year by crypto startups and technology ventures. 

More than $13 billion - The total trading volume of NFTs in 2021, according to The Block's annual research report. The figure reflects a huge jump of 42,988% of the trading volume compared to the cumulative turnovers recorded in 2020, which totaled just over $33 million. The report also shows that close to 88% of 2021 total trading volume in the NFTs market was concentrated in the OpenSea online trading arena, which amounted to more than $12.5 billion in trading volume for the platform. 

More than $32 trillion - This is the cumulative trading volume in 2021 of Bitcoin and Ethereum futures. According to The Block, this trading volume reflects a 338% increase in trading volumes compared to 2020, which recorded an annual figure of more than $7 trillion. The peak month in terms of futures trading in the market was May 2021, when the monthly trading volume reached a level of more than $4 trillion. The largest trading platform in the market for futures contracts on Bitcoin and Ethereum is Binance. 

More than $14 trillion - This is the cumulative annual volume of cryptocurrencies reported in 2021 by centralized cryptocurrencies. This figure reflects a 689% increase compared to the trading volume in 2020, which amounted to a total trading volume of more than $1.8 trillion. Compared to the centralized exchanges, where most of the trading in the cryptocurrency market is concentrated, distributed crypto exchanges (DEX) concluded the past year with a cumulative trading volume of more than $1 trillion.

Read also: 5 Cryptocurrencies Beyond Bitcoin To Keep On Your Radar in 2022

See our full 2022 outlook series here.

Highlights and Key Events of a Record Year for Cryptocurrencies

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