Looking Back on 2021
Beyond all questions, 2021 has been the year of crypto. The world became more crypto-friendly and metaversed.
Below, we first recap the big events of the past year, then envision the future with our 2022 predictions.
1. Elon Musk – the Influencer
In 2021, as the CEO of SpaceX and Tesla, Elon Musk entered into the crypto market and often tweeted about different cryptocurrencies, impacting their prices. Bitcoin spiked after Elon Musk added #Bitcoin to his Twitter bio in January and Tesla added a ton of Bitcoin to its balance sheet in February, 2021.
In May, he tweeted a worldwide concern about the usage of fossil fuels for Bitcoin mining, which led to a price drop. Interestingly, the crypto market turned around in July, as Elon expressed his supportive stance on crypto and also first mentioned he held Ethereum in his portfolio during the ‘The B Word’ conference with Jack Dorsey and Cathie Wood.
2. NFT
The concept of NFTs originally aimed to distinguish each token with unique parameters. This type of token can be bound with virtual/digital properties as unique identifiers. With NFTs, all marked properties can be freely traded with customised values according to their ages, rarity, liquidity, etc. Various types of collectibles can be tokenised, ranging from digital arts, to gaming, music, and films.
The NFTs market was mushrooming (pumped over 7000% in sales volume since January) in 2021 due to increased attention from the public. As of 8 December, the total sales volume on NFTs market surpassed USD 12B
3. Memecoins in the Spotlight
Meme coins are cryptocurrencies inspired by memes or jokes on the Internet and social media. They are mainly community-driven and can gain popularity overnight due to online community endorsements. Some popular meme coins of the dog variety include Dogecoin, Shiba Inu, Dogelon Mars, Samoyedcoin, and Akita Inu.
In 2021, the frenzied public interests in crypto had led to an exponential growth and an overall market capitalization of over $45B. The top two leading meme coins were Dogecoin (DOGE) and its rival Shiba Inu (SHIB). On 8 May 2021, DOGE had gained over 8000% since the start of the year by market capitalization. Its rival, SHIB, had pumped more than 5000% in terms of token price changes since January.
As of 6 December 2021, their total dominance in the market was beyond 2% according to messari.io.
4. Blockchain Interoperability
What’s the coming trend in blockchain? Without doubt, bridges. The interoperability of heterogeneous blockchains to facilitate cross-chain interactions boosted a jump in development for blockchains in 2021.
Apart from Ethereum, we saw the rise of Solana, Avalanche, Terra, and Fantom this year with their TVLs climbing over 500% since January. Predictably, the boom of bridge ecosystems will continue. Some other popular projects, such as BSC, Polygon, Arbitrum, and Optimism, can be expected to join the ranks.
5. El Salvador
Who would have imagined that Bitcoin would become a legal tender in 2021?
Year 2021 marks the start of the crypto-friendly era, and its most prominent case study is Bitcoin’s legal tender by El Salvador.
On 5 June, El Salvador President Nayib Bukele declared that Bitcoin would become a national legal tender. It was not long before the Bitcoin Law was passed on 9 June and on 24 August, its official Bitcoin wallet – Chivo – was launched. Interestingly, on 22 November, Nayib Bukele announced his government will build an oceanside ‘Bitcoin City’ at the base of a volcano.
As a small central American country, El Salvador and its people moved the world. Furthermore, a $1B bitcoin-backed bond is scheduled for early 2022. We expect to see more adoption use cases in the near future.
6. China Launched CBDC
As the world’s second largest economy, China is leading in developing a national digital currency, which it has been working on since 2014. As of November, China’s CBDC has been used for $9.7B transactions and 140 million people have opened wallets for the digital Yuan (eCNY). The eCNY has been widely adopted in commercialised systems.
According to Mu Changchun, the General Director of the Digital currency institute of China’s central bank, over 1.5 million merchants accept payments using eCNY wallets now. In addition, 10 million corporate accounts had been created, according to Bloomberg.
China’s Ministry of Commerce announced that more than 10 major cities had tested the usage of eCNY in 2021. We are looking forward to experiencing ECNY during the upcoming Winter Olympic 2022.
