Year Ender 2021: Key Trends Dominating Cryptocurrencies This Year
Bitcoin nearing $70,000, billions of dollars worth of Memecoin, a blockbuster Wall Street listing and a sweeping Chinese action: 2021 was the wildest yet for the cryptocurrency, even by the sector’s volatile standards. The digital asset started the year with a cash rush from investors big and small. And bitcoin and its kin were rarely out of the limelight, as the language of crypto became firmly entrenched in the investor lexicon. ( dominate cryptocurrencies)
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Trends Dominating Cryptocurrencies This Year
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Bitcoin: Still No. 1
The native cryptocurrency held its crown as the largest and best-known token. Bitcoin surged more than 120% since January 1 to the then-record nearly $65,000 in mid-April. Fueling this was a tsunami of cash from institutional investors. Growing acceptance by major corporations such as Tesla Inc. and Mastercard Inc., and increasing embrace by Wall Street banks. Of interest to investors was the alleged inflation-proof properties of bitcoin. It has a limited supply. Because the record-breaking stimulus package fueled rising prices. The promise of quick profits amid record-low interest rates, and easy access through a fast-paced infrastructure also helped attract buyers. Symbolizing bitcoin’s mainstream embrace was the April listing of major US exchange Coinbase for $86 billion, the largest listing for a cryptocurrency company to date.
fell 35% in May and up $69,000 in November
Richard Galvin of the crypto fund Digital Capital Asset Management said it is a graduate in the field where it is traded by people who bet on treasuries and equities. Yet the token remained volatile. It fell 35% in May and hit a new all-time high of $69,000 in November, as inflation soared across Europe and the United States. Prominent skeptics remain, with JPMorgan boss Jamie Dimon calling it “useless”. Graphic: Peaks and Troughs: Bitcoin’s Rollercoaster of 2021, https://graphics.reuters.com/FINANCE-YEARENDER/mypmnaljavr/chart.png
- Rise of memecoins
Even though bitcoin remains the go-to for investors dipping their toes in crypto, a slew of new ones. Some would say jokes. Tokens entered this area. A loose collection of coins ranging from Memecoins, Dogecoin and Shiba Inu to Squid Game, which have their roots in web culture. Often of little practical use. Dogecoin, which launched in 2013 as a bitcoin spinoff, rose to a high of more than 12,000% in May before falling nearly 80% by mid-December. The Shiba Inu, which refers to the same breed of Japanese dog as Dogecoin, Shiba briefly clawed its way into the 10 largest digital currencies. https://graphics.reuters.com/FINANCE-YEARENDER/gdvzymlzkpw/chart.png
The Memecoin event linked to the Wall Street bets movement (dominate cryptocurrencies)
The Memecoin event was linked to the Wall Street bets movement, where retail traders coordinated online to pile in stocks such as Gamestop Corp, squeezing hedge funds’ short positions. Many traders – often stuck at home with spare cash – during the coronavirus lockdown. turn to crypto, even as regulators warned about volatility. Joseph Edwards, head of research at crypto broker Enigma Securities, said, “It’s all about raising finances. While assets like DOGE and SHIB can be purely speculative in themselves, the money coming in is ‘Why shouldn’t I earn on my money, savings? Coming from the trend” Graphic: The Rise of Memecoin, https://graphics.reuters.com/FINANCE-YEARENDER/klpyknyxwpg/chart.png
- regulation
Bitcoin fell 50% in May
As money poured into crypto, regulators saw it as the potential to enable money laundering and endanger global financial stability. A rebel technology watchdog invented to undermine traditional finance, long-skeptics about crypto, called for more powers over the sector, warning some consumers over the volatility. With the new regulations in place, the crypto markets were prepared for the potential risk of a clout. When Beijing curbed crypto in May, bitcoin fell nearly 50%, bringing the broader market down. Stephen Kelso, Head of Global Markets, ITI Capital, said regulatory risk is everything because they are the rules of the road that people live and die in financial services. Regulators are making good progress, they are catching up.
- NFT
As Memecoin trading went viral, another previously obscure corner of the crypto complex also grabbed headlines. Non-fungible tokens (NFTs), strings of code stored on the blockchain digital ledger that represent unique ownership of artifacts, videos or even tweets, exploded in 2021. In March, a digital artwork by American artist Beaple sold at Christie’s for nearly $70 million, making it one of the three most expensive artworks ever sold by a living artist at auction. The sale started the stampede for NFTs. Sales reached $10.7 billion in the third quarter, up eight times from the previous three months. After volume peaked in August, prices for some NFTs rose so rapidly that speculators could “flip” them for a profit in days or hours.
Big investors became largely clear (dominate cryptocurrencies)
A surge in crypto prices giving rise to a new group of crypto-rich investors – as well as predictions for the future of the online virtual world where NFTs take center stage – helped fuel the boom. John Egan, CEO of L’Atelier, a research firm owned by BNP Paribas, said the popularity of cryptocurrencies and NFTs could also be linked to the decline in social mobility. While some of the world’s top brands, from Coca-Cola to Burberry, have sold NFTs, the still-patchy regulation means that big investors have largely steered clear. I don’t see a situation where licensed financial institutions are actively and aggressively trading (in)digital assets over the next three years,” Egan said. ( dominate cryptocurrencies)
