HomeFinanceCryptocurrency events in 2021: The Good and the Bad

Cryptocurrency events in 2021: The Good and the Bad

If you are a crypto trader or a crypto enthusiast, you’d agree that 2021 was one of the controversial years in the history of cryptocurrency. There were so many positive trends and some major backwardness and price stiffness on some blockchains. It should, however, be noted that the crypto community right from time is not one that would enjoy all-year greens without the red. However, one could be more than the other. In this case, it was a rollercoaster of emotions for most crypto traders.

Major cryptos made new records shattering the previous ones, user adoption rate grew, and crypto became even more mainstream, amongst other growths. Amidst the bull runs and good times were the dips and corrections, which lasted more than usual.

Altcoins and DeFi

Before the beginning of 2021, crypto enthusiasts predicted 2021 as the year of altcoins. However, the altcoin wasn’t specified, so crypto investors just assumed they needed to have a fill of their assets and maybe acquire a little more altcoin. Solana (SOL) and Terra (LUNA) were two of the top gainers of 2021, with Solana gaining about 9,500% and Luna about 13,000%. The main reason for their growth could be traced to their ecosystem’s growth and significant investment by both private institutions and investors. Also, you’d recall that both cryptos are tagged “ethereum killers,” Which was also responsible for the growth and their massive price rallies.

On the other hand, decentralized finance also enjoyed substantial growth across all major crypto trading platforms. Both Solana and Luna were amongst those few tokens in TVL (total value locked). Luna sitting comfortably on number two after surpassing BNB with over $18.9 billion and Solana on number five with about $11.45 billion. Although, till now, DeFi’s market cap accounts for a fragment of the entire crypto market cap, it is worthy to note that with the growth it enjoyed in 2021, if it could maintain the pace, it soon will account for a huge fraction. Several investors believe the integration of legacy banking into DeFi could be one of its focuses in 2022.

Non-fungible Tokens (NFTs)

Still, on the good that happened in the crypto community in 2021, we had the NFTs breaking out to become one of the crypto community’s successful ecosystems. Maybe you don’t know, NFTs have been in the crypto market since 2014, but they became mainstream in 2021, surpassing an approximate value of $14 billion in December. The main factor behind this growth is in the sales of digital arts and collectibles, totally dominating about 91% of the growth of NFTs. Individual artists joining the crypto space were also a reason behind the inflow, although it was just for about six months before more brands came in and made it mainstream during the remaining half of the year. One of the most profitable NFT collectibles in 2021 was CryptoPunks compared to others. It’s important to also note the impact of NFT on the gaming industry, as well as its alliance with the metaverse concept. There are, however, several critics doubting if NFT could maintain its parabolic surge in 2021 till 2022 and beyond. It’s worth noting that NFT funding in 2021 has already hit a total figure of $2.1 billion in Q3.

Crypto Regulation

One of the bad and ugly parts of 2021 was crypto regulation. Although there have been several announcements in recent years concerning the regulation of crypto trading platforms and their activities, 2021 brought back memories. It didn’t just end in the usual context like it has always been in recent years. The 117th US congress saw the introduction of about 35 crypto bills in line with crypto activity regulations. Although some analysts believe this shouldn’t disrupt the adoption of cryptocurrency being more mainstream, it could lower the growth if there is no proper sensitization of what the regulation is about and how it would be done. There have been ongoing plans to introduce a comprehensive bill in 2022; hence several crypto investors are beginning to keep records of their transactions, as well as their losses, as crypto tax seems imminent. On the other hand, it should be noted that crypto regulation would be taking a point this year with more regulations hitting the crypto space.

As mentioned earlier, 2021 was a rollercoaster of emotions with several ups and downs in the crypto community. Since most altcoins and major cryptocurrencies recorded their all-time highs, most crypto analysts wonder if they could do the same in 2022 or if 2022 would be a year of correction. Will the crypto community remains bullish? Or would it be all bear throughout? Let’s see what 2022 has in store for all traders.

I am Content Writer . I write Technology , Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. Linkedin


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