Here is the complete list of the winners and losers of cryptocurrencies for the year 2021.
The cryptocurrency and blockchain industry see explosive growth in 2021, particularly in the areas of decentralized finance (DeFi) and irreplaceable tokens (NFT).
This year has also been marked by continued price volatility, China's puzzling behavior, major experiments in Central America, increased institutional interest, and the emergence of several faster smart grids - all reflected in this year's "industry winners and losers" list.
When China effectively banned Bitcoin (BTC) mining operations in May 2021, Kazakhstan rushed to fill the void by directing abandoned miners and others to cheap and plentiful supplies of coal. Many have established operations in the Central Asian country, including a cryptocurrency mining pool operated by BIT Mining.
In July 2021, Kazakhstan's average monthly hash rate was 18.1%, almost a fifth of global bitcoin production, second only to the United States (42.7%) and a surprising increase of only 1.4% in September 2019, according to the Cambridge Center for Alternative Funding. Whether Kazakhstan will maintain its global share of BTC production in 2022 remains to be seen, given reports of the country's widespread electricity shortages as winter approaches.
Coinbase Global, the largest cryptocurrency exchange in the United States, was the first crypto company to be listed on a US exchange when it debuted on Nasdaq on April 14. It ended the day at $328.28 with a market cap of $86 billion, a surprising start that led to comparisons with Facebook and Airbnb's initial public offerings. However, the stock price has bottomed out again at the end of the year, at $243.35 on Dec. 18, with a still strong market cap of $52.37 billion.
Coinbase's listing has been widely seen as another sign that cryptocurrencies have become mainstream, with more public proposals pending. “Coinbase will be the torchbearer for the entire blockchain community in the public marketplace,” Cavita Gupta, founder and managing partner of the Delta Growth Fund, said.
In 2021, an influx of new networks with enabled smart contracts appears. The largest and fastest growing is Solana, a super-fast betting verification network that claims to complete 50,000 transactions per second (TPS). In comparison, Ethereum does around 30 TPS.
“No project – perhaps in crypto history – will get hotter and faster than Solana in 2021,” wrote Ryan Selkis of Messari. The open source blockchain is home to a growing number of NFT and DeFi projects, although it will be the subject of several distributed denial of service attacks until 2021. Solona's native cryptocurrency (SOL) easily ranks fifth among all coins on December 20. Only behind BTC, Ether (ETH), Binance Coin (BNB) and Tether (USDT).
Nayib Bukele / El Salvador
El Salvador went down in history in 2021 and was the first country to declare a Bitcoin (BTC) legal tender. The country's dynamic president, Nayib Bukele, captivated the crypto world with his actions: he used volcanic energy to run BTC mining operations in his country, sent $30 BTC to every adult in the country, and announced the launch of Bitcoin City arriving in late November, a city fully functional one built around Bitcoin and initially funded with $1 billion worth of Bitcoin bonds.
Time will tell if this is an obvious economic "win" for the people of El Salvador, but Bukele is most likely 21st due to a decline in purchases in the impoverished Central American nation whose economy relies heavily on the translation of money - that is, money from abroad. Send worker’s home.
Mike Winkelmann, aka Beeple
When Christie's released its digital collage collage in February - the first major auction house to offer pure digital work with a unique NFT - not even a price was quoted. No one knows how to rate it. Mike Winkelmann's "Everyday: The First 5,000 Days" (aka The Beeple) sold for $69.3 million, and the art industry may never be the same.
In comparison: The work auctioned off more than Georges Serra, Paul Gauguin or Salvador Dali and catapulted the relatively obscure Beeple into the world's most lucrative companies of contemporary artists like David Hockney and Jeff Koons. He also sent notifications to people outside of cryptocurrencies that irreplaceable tokens were on their way. NFT sales grew through 2021, and in late November, "NFT" was named "Word of the Year" by Collins Dictionary Publishers.
Avalanche is another fast-paced smart contract network leading the top 10 in 2021. “Solana and Avalanche are the new stars” among the multi-chain of DeFi announced by CoinGecko with 6% and 2% total value (TVL), respectively. , in the third quarter. (Avalanche hosts the Aave DeFi protocol.) This TVL advantage comes from Ethereum, which owned nearly all of TVL DeFi at the start of the year (99%). In comparison, the share at the end of the third quarter was 76%.
Avalanche's local currency, AVAX, was ranked 10th in market value at $27.3 billion at the end of December, likely supported by a deal with Deloitte to support consulting work with the Federal Emergency Management Agency.
Sam Bankman-Fried / FTX
In 2021, Bankman-Freud was named the “richest person in cryptocurrency,” thanks in large part to his stake in FTX, the cryptocurrency derivatives exchange he founded in 2019.
According to CoinGecko, FTX is the second largest cryptocurrency exchange by the end of 2021, trailing only Binance (futures). Butcher called FTX "the fastest growing company ever," noting that Bankman-Fried built a $25 billion factory with less than 100 employees in less than three years.
FTX closed a $900 million financing round in July that valued the stock market at $18 billion, up from the $1.2 billion previously owned by SoftBank, Sequoia Capital, Coinbase Ventures, Multicoin, VanEck and the Paul family, Tudor Jones, involved. In June, FTX acquired the long-term naming rights for the NBA's Miami Heat basketball arena.
The NFT phenomenon has become a boon for digital artists who can sell their work without agents and physical art galleries, but still need a digital marketplace. OpenSea, the first engine in the NFT arts sector and a market leader, emerged as one of the biggest winners of the year.
OpenSea takes a relatively modest 2.5% commission on each sale of its platform, but it generated significant sales of $79 million in August, its peak month in 2021, according to consulting firm. Partly in November, sales this year exceeded $235 million. Not much has changed in December: "The dominant NFT market globally is taking cash," Messari said.
With the launch of the first exchange-traded Bitcoin fund (ETF), which was approved by the US Securities and Exchange Commission, some kind of obstacle was overcome in mid-October. The ProShares Bitcoin Strategy ETF (BITO) made a dramatic debut on the New York Stock Exchange as the second most traded fund on its opening day and has been described by some as a "turning point for the crypto industry".
Its start ended eight years of futility by US fund issuers – the Winkelvoss ETF was the first to be rejected by the SEC in 2013 – but some are still disappointed that the runaway fund is based on ETF futures rather than directly reproduced Bitcoin (BTC) prices. The SEC seems to prefer to have two levels of regulatory protection - viz. Oversight by the Commodity Futures Trading Commission and the SEC – and this was further confirmed a few weeks later when the SEC rejected VanEck's application for a spot market ETF.
Losers in 2021
China already controlled two-thirds (67%) of global cryptocurrency production as of September 2020, but banned mining in May for unknown reasons. However, this could be related to the need to protect its own central digital currency bank (CBDC). which seems close to its full introduction.
In any case, Bitcoin's hash rate immediately dropped 50%, which rocked the market for a while. However, other countries quickly gained strength, including the United States, Kazakhstan, Russia, and Canada. In retrospect, many see China's actions as a gift to the West. “Today the [Bitcoin] network is more decentralized than ever and its price has increased by 50%,” said analyst Willy Woo.
Stable coin company Facebook Libra (now Diem) was announced with much rumbling and a blue-chip list from partners in 2019, but the project has been constantly being put on hold and scaled back. Not much has been heard of Diem these days, except perhaps related to exits – for example, Dante Disparte joined Circle, while recently David Marcus, director of cryptocurrency operations, said he would be leaving the company at the end of the year.
Facebook, which has been renamed Meta, has been criticized by US lawmakers for its "influence" on social media in general, and its stable coin project, originally slated for early 2021, may have been linked to it. There can't be much clarity. As the New York Times commented, “The cryptocurrency Libra was eventually renamed Diem, while the crypto wallet company's venture was called Novi. Name combinations are often confusing, even to insiders.
Central Bank of Nigeria
In February, the Central Bank of Nigeria ordered all its local banks to close customer accounts using cryptocurrencies. The CBN governor said most crypto accounts were used to fund “illegal” activities such as money laundering and terrorist financing.
Nigeria is expected to release digital currencies soon to central banks like China, so CBN may have followed China's program to eliminate all competing cryptocurrencies pending the introduction of CBDCs. If so, his attempt was a complete failure.
Not only has the crypto survived, it also had the world's second largest market for peer-to-peer trading in August.
There was a time when Virgil Griffith was a celebrity in the crypto world. The former Ethereum developer and US citizen traveled to North Korea in early 2019 to attend a cryptocurrency conference. In November of the same year, he was arrested in Los Angeles for violating the US Sanctions Act.
“I don't think what Virgil did helped the DRPK to do anything wrong. He gave a presentation based on publicly available information about open-source software,” said Ethereum co-founder Vitalik Buterin at the time.
In September 2021, shortly before his trial began, Griffith pleaded guilty to conspiracy to violate US law by traveling to North Korea to give a presentation on how blockchain technology is used to launder money and evade sanctions,” the Wall Street Journal reported. He faces six and a half years in prison as part of a plea deal. It is not clear what prompted him to change his request.
Iron Finance (TITAN)
It might not be a good idea to secure a stable coin - like IRON - with another stable coin in USD Coin (USDC) and an obscure management token (TITAN). In this case, the result was what was called the "world's first launch of a major crypto bank" - specifically the implementation of the Iron Finance Protocol. The result: By the end of June, TITAN was down from more than 60 dollars to several thousand cents within hours.
CipherTrace later said the incident was the result of a design flaw: "Iron. Finance does not have a suitable stabilization mechanism." Meanwhile, a number of investors have been set on fire, including Dallas Mavericks owner Mark Cuban, who called for regulation to determine "what is stable and what collateral is acceptable". Iron Finance (ICE) was trading at around $0.002 on December 20.