Crypto has been a very hot topic for 2021. With countless events taking place in space, it’s hard to keep up with everything happening on this front-burner of finance! But here at Prolitus, we have compiled some of the most era-defining events that have usurped the crypto space –so that you can stay informed throughout all things crypto
Cryptocurrencies are taking off like never before led by buzzwords such as DeFi, NFTs, Metaverse, and more. Although this has been making waves in the financial world for some years now, it wasn’t until recently that their use cases expanded beyond currency and into other areas like real estate, healthcare, finance, and gaming. One of the many reasons to be excited about cryptocurrencies is that they are more decentralized than any other form or currency in existence. And with their total market capitalization topping $3 trillion, it is an indication that there has never been a better time than right now to explore the unmatched possibilities thrown open in the crypto world!
In 2021, the idea of cryptocurrency as a form for currency gained more traction than ever before. The year that was also saw leading crypto exchanges listing Web 3.0 relevant tokens on their platforms, which marks the beginning of a new era where technology beats sentimentality as well!.
As the world prepares to jump into Web 3.0, people have been exposed more than ever before to the adoption of digital tokens. With mainstream acceptance and new digital coins emerging across Europe as well as Asia Pacific regions, people are now eagerly taking to cryptocurrencies instead of cash because the former offer more benefits than before. They are facilitating faster transactions and have lower fees or no wait times.
From witnessing major announcements in crypto markets and challenges against central authorities by governments worldwide, this was truly a defining year for the crypto space, where we witnessed how far digital tokens can go! Even though there have been countless defining moments, we compiled a list of some of the key historic trends that defined the crypto space in 2021.
Bitcoin hitting $1 trillion MarketCap
The cryptocurrency market is attracting more and more attention from big banks, which have traditionally viewed the space with skepticism. Today many financial institutions are allocating capital to this area as it continues its climb towards greater heights in popularity- just take one example being asset management firms!
Undoubtedly, the interest in the cryptocurrency market is skyrocketing. With Bitcoin breaking its all-time high records, rising past $60K for the first time in history in 2021, it’s safe to say that bitcoin continues on an upward trajectory and its popularity is only going to increase. Apart from bitcoin, other leading crypto assets such as Binance Coin, Cardano, Solana, and Ethereum scaled new all-time highs in 2021.
Broader institutional adoption of Cryptocurrency
The business world was caught by surprise when Tesla, Square, and MicroStrategy started to use portions of their cash reserves to buy Bitcoin. The move serves as an indicator that major corporations are beginning to take a new look at how they might be able to use cryptocurrency for greater efficiencies when conducting transactions online or through internal systems like payrolls.
PayPal and its subsidiary – Venmo, two of the most well-known financial gatekeepers in America are now facilitating crypto trading. The data from these companies show that when they enabled this function for their users – those who bought coins on an app or website linked with PayPal had increased activity by 2x as much over time periods before it was allowed to make transactions in cryptocurrency!
In December 2021, the CME introduced Micro Ether future contracts – new innovative products that will allow traders to invest in smaller quantities of cryptocurrency. This move has opened up a new trading market for cryptocurrency investors, allowing them to bet on the value of these currencies without having their funds locked away.
Coindesk also noted that since 2020 many Bitcoin whales have been increasing rapidly which means there are more than enough people willing and able to buy large amounts at once if needed!
All the above instances point towards the swift uptake of cryptocurrency by prime financial gatekeepers and major institutions such as banks. Greater adoption of the crypto ecosystem is especially notable because this was previously considered an unlikely prospect, at least till now!
New-age DeFi
The crypto community was captivated this year by the idea of DeFi (Decentralized Finance) applications. DeFi projects have undoubtedly been one of the biggest trends in the crypto world for the next year. These new financial transactions take place on blockchain, and they are typically enabled through smart contracts that are powered by digital currency like Bitcoin or Ethereum. Unlike traditional payments or transfers that require a financial intermediary in between the sender and recipient of funds – DeFi transactions avoid this unnecessary middleman. In recent times, these decentralized finance-based ventures have been building up a strong foundation and experts believe that it is only going to continue growing as more people adopt tokenization methods with Ethereum – built on DeFi protocols!
One recent application for decentralized finance is called yield farming that is gaining prominence. In this new type of financial system, yield farmers lend out crypto assets to other platforms. They charge interest or new cryptocurrencies in return for crypto assets. At first glance, yield farming seems much like digital banking where users deposit their funds and receive a guaranteed rate of return depending upon how much they put into that platform’s lending pool. However, it involves offering high rates to depositors in exchange for providing liquidity and interest on their funds! The yield farming platforms are gaining prominence as investors search out ways of taking advantage during these low-interest-rate environments. The higher rates they offer can be attractive for depositors and borrowers alike, which is why it’s not surprising that these high-yield financial institutions have been growing steadily over recent years
The idea of decentralized exchanges (DEX) is also catching on as more and more people shift away from traditional platforms. DEXs have several advantages over their centralized counterparts, like not having to trust someone else with your funds or data. One of the major benefits that investors in cryptocurrency have found themselves seeking out during this time is having total control over their digital assets. This has led many people to invest with them instead.
Uniswap and Sushiwap emerged as the two leading and largest decentralized crypto exchanges, registering the majority of trading volumes throughout 2021.
The rise in value for DeFi tokens has been nothing short of incredible. With every new innovative use case, people are flocking towards this exciting technology largely due to its speed, transparency, and its affordability and hence this could change the way we think about finance forever! Moreover, with new crypto assets showing up across leading exchanges, we can be sure that big things are coming our way soon. The unprecedented growth in the DeFi space is only just the beginning for more new and interesting trends and development companies may find a lot of lucrative business opportunities.
NFTs – Tokenize Everything
The sale of Christie’s fully-digital NFT artwork at $69.3 million was quite a record-breaking moment that also prompted mainstream coverage of NFTs that was never seen before.
All those who thought Non-Fungible tokens (NFTs) are just a short-lived fad have been proven wrong as they have emerged as one of the most promising developments in the crypto space. These digital assets allow people to trade unique things with each other on blockchain networks without using fiat currency, which is very exciting! NFTs are unique in that they can be traded, divided into smaller pieces and represent a claim to things like domain names, games, collectibles, or physical artwork. The art world has had a problem with ownership and copyright for ages, but now it’s about to get much easier thanks to the NFT technology. They’re also not limited to digital assets. One example would be CryptoKitties where you can buy and sell furry animals like cats or dogs from all over the world through an app store-style interface that connects buyers & sellers directly via embedded smart contracts that describe the digital or physical product they represent.
The recent influx of new investors in the crypto space has caused several NFT marketplaces to open their doors. These opportunities have given traders access to not just one, but many digital items they can purchase or sell on these sites. The increased growth within cryptocurrency markets is driving up the demand for various types of goods and services which will only serve as fuel during this exciting time period ahead!
Overall, the NFT market had a record-breaking year in 2021, with over $23 billion worth of trading volume and the adoption by gamers. This was reported by analytics platform DappRadar who found blockchain-based metaverses to be popular as well for their gaming assets that totaled up at around $4.5 billion in trading volume!
NFT trading volume is likely to grow exponentially over the coming years, thereby NFT marketplace development companies should watch out for this space for tapping into interesting business opportunities.
Stablecoins And CBDCs Alter The Crypto Ecosystem
Stablecoins are the new hotness in cryptocurrency, with many people speculating about which one will succeed. Tether is by far most popular at over half ($98B) of all stablecoin valuation but there’s still potential for growth from other sources! In fact you can find these coins being used within DeFi applications because they offer relative stability when compared to more volatile assets like Bitcoin or Ethereum-based tokens.
Central banks are pouring money into developing digital currencies that could lead to an era of uncontrolled speculation in private currency. Central Bank Digital Currencies (CBDCs) or even stablecoins may be introduced. Cryptocurrency, especially the more volatile coins like Bitcoin and Ethereum are becoming less popular with central banks around the world looking into CBDCs. This is due to not only because of new innovations such as NFTs but also general market volatility paired alongside many alt-coins that have been popping up recently including Polktadot or Litecoin alongside them .
Government Regulation
As the value of cryptocurrencies like Bitcoin skyrocketed, regulators showed concern over this rebel technology and how this could wreak havoc on global finance with its potential to facilitate money laundering. As more and more money poured into the cryptosystem, watchdogs called for stringent regulations to exercise greater power over the sector, with some warning consumers about volatility.
The year also saw a significant backlash against cryptocurrencies, with China being at the forefront in cracking down heavily to the point of even placing a complete ban on most cryptocurrency transactions. The Indian government is also planning to act on similar lines and positively regulate the crypto markets, with restrictions on crypto trades and investments.
In one of its firsts, Bitcoin also saw adoption as a legal tender by the El Salvador government. The government authorities there passed the legislation to allow businesses to price their goods in Bitcoin thus becoming the first country to do so. This small Central American nation is now providing its citizens with one more way to not only protect themselves from inflation but also gain access to the digital economy via cryptocurrency transactions! This new legislation means that businesses no longer need to worry about taxes on their capital gains.
Expanding Market for DApps
DApps have the potential to be a game-changer in how we work and play. These decentralized applications will allow us all the more freedom, reducing our reliance on third-party intermediaries like banks or traditional lending institutions while simultaneously lowering costs for consumers by eliminating unnecessary fees associated with traditional financial systems. They run on a distributed peer-to-peer network. The total DApp transaction volumes have increased manifold. Although most of the DApps operate on the Ethereum blockchain, platforms such as EOS and TRON are also gaining importance.
Talking of dApp, a blockchain infrastructure provider that is all set to revolutionize the world of dApp projects is Zeeve.
Zeeve’s intuitive and no-code platform makes it easy to deploy your blockchain nodes, DeFi applications or dApps on enterprise-grade infrastructure. Get a deployment up in just minutes with real-time analytics tools that will keep you informed about everything happening across the network!
Zeeve is ready to deploy a permissioned or public blockchain network, with nodes specialized in Permissioned protocols such as Hyper Ledger and Corda. Regardless of the network- they have got your back with our experience in creating high-performing developer networks as well as staking nodes that are secure while providing seamless integration into an already existing hybrid blockchain ethereum like DAML (Digital Assets Management Ledger).
The road ahead for Crypto players
The above highlights of 2021 had a significant impact on the crypto industry as a whole, creating a paradigm shift in the crypto space. This change is what drives investor optimism as we head into 2022, unlike 2020 when the market was one-dimensional with little diversity. The market became more diverse thanks to Metaverse, DeFi (Decentralized Finance) NFTs or category relevant tokens making investing approachable.
The upcoming year will see a number of solutions coming up that make decentralized blockchains cheaper, scalable, and sustainable. These developments augur well for the industry but it seems like Bitcoin’s dominance might be on its way out with more people interested in quality projects such as Ethereum or Solana among others than before.
Even though the prices continue to show an uneven trend due to the low buying-selling ratios, from here on it will only be the value that will drive the crypto market further.
