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The Five Biggest Crypto Stories of 2021

The year 2021 may be very close to ending, but its impact on the cryptocurrency market and the wider world will continue to be felt for years to come. It was a year in which crypto entered the public’s collective consciousness in a way like never before, with regular coverage of new all-time highs being supplemented by a variety of crypto-related trends, from NFTs and Web 3.0 to the blockchain-based gaming and the metaverse.

In commemoration of the outgoing year, this article will provide a retrospective of the five biggest crypto stories of 2021. Yet more importantly, it will also look forward to how these stories will shape the industry in 2022 and beyond.

Tesla wasn't the first Fortune 500 company to add Bitcoin to its balance sheet and it likely won't be the last.

1. Tesla Buys Bitcoin, Musk Flirts with Dogecoin and Shiba

If there was one piece of news responsible for launching bitcoin and other cryptocurrencies to record highs, it was February’s revelation that electric vehicle manufacturer Tesla had purchased $1.5 billion in BTC.

Explaining the move in its 10-K filing to the SEC from, Tesla noted that a need to maximize returns on cash reserves was its chief motivation.

“In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity […] Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term.”

Tesla also revealed in the same filing that it would eventually begin “accepting bitcoin as a form of payment for our products in the near future.” However, it backtracked on this suggestion in May, citing the environmental impact of Bitcoin mining in its reasoning.

This U-turn on acceptances precipitated a market slide which effectively wiped out the gains Tesla had made on its bitcoin investment (although the market began rising again in late July).

Despite Tesla’s eventual refusal to accept BTC as a means of payment, its investment in the cryptocurrency has set a momentous precedent for other companies to follow. Few really big companies have taken a leaf out of its book as of writing, but with many US-based multinational corporations sitting on huge cash piles, the increasing mainstream acceptance of bitcoin could mean it’s only a matter of time.

And if Tesla’s purchase of bitcoin weren’t enough, CEO Elon Musk spent a significant portion of 2021 championing other cryptocurrencies. Most notably, he devoted a significant number of tweets to Dogecoin and Shiba Inu, two meme coins that have now become implausibly popular as a result.

Source: Twitter

While cynics may suggest that Musk’s involvement with DOGE and SHIB are part of some kind of pump-and-dump scheme, it has served to introduce cryptocurrency to a growing number of new users and investors. And this can only be good for the long-term sustenance of crypto.

2. Facebook Flips to the Metaverse

Perhaps not surprising given its size and reach (and moral dubiousness), but Facebook usually features in retrospectives of a year’s biggest news stories, and 2021 was no exception.

This time, founder Mark Zuckerberg announced in late October that it would be changing its company name to Meta, as part of a future shift of emphasis towards ‘the metaverse.’

This news was highly significant as far as crypto was concerned, given that a number of blockchain-based platforms had already built their own metaverse-like game worlds in which users could spend crypto and purchase items (or virtual land) as NFTs.

Such platforms — Decentraland, the Sandbox and Axie Infinity most notably — quickly saw their native tokens reach all-time highs, with the biggest among them continuing to see increased engagement and demand even after the initial buzz subsided.

Indeed, the metaverse subcategory on CoinGecko went from a combined market cap of $14.2 billion on October 29 (the day after Facebook’s announcement) to $24.6 billion as of writing.

3. El Salvador Adopts Bitcoin as Legal Tender

El Salvador raised the eyebrow of many an onlooker in June when its parliament voted to adopt bitcoin as legal tender. Following a very quick turnaround process, it then officially implemented this change on September 7.

June’s news had a modest rather than massive effect on the cryptocurrency market, helping bitcoin to rise from around $33,400 to $40,600 in a week, before it sank as low as $31,000 in just under a fortnight. The rollout in September was also fraught with technical difficulties and confused skepticism from El Salvadoran nationals, with some protests welcoming bitcoin’s introduction.

However, as with Tesla’s investment in bitcoin, El Salvador’s embrace of the cryptocurrency creates another important precedent. And with a few other nations considering the possibility of accepting the use of bitcoin as payment, El Salvador’s example may eventually open the floodgates to wider adoption in the not-too distant future.

4. NFT Sells for $69 Million

‘Non-fungible token’ was in fact Collins Dictionary’s word of the year in 2021, in recognition of the fact that a large part of the Internet went crazy for NFTs this year.

While the blockchain-based technology enabling NFTs had already been around for several years, 2021 witnessed a convergence of NFT-marketplace launches and celebrity endorsements that caused interest in non-fungible tokens to shoot through the roof.

Probably the earliest significant use of NFTs in 2021 came from rock band Kings of Leon, who in March launched a range of NFT-based extras to go with the release of their latest album. This helped get the ball rolling for NFTs in a big way, with even big mainstream music websites such as Pitchfork writing op-eds on why non-fungible tokens will prove important for musicians.

And a little later in that same month, artist Beeple sold an NFT artwork (basically a JPEG with an NFT-based receipt of its ownership) for $69 million. Even more than Kings of Leon, this served to firmly implant NFTs in the public imagination.

Indeed, thanks to such big sales, the NFT market expanded from $2.5 billion in the first half of 2021 to $10.7 billion in the third quarter of the year alone.

Such volumes attest not only to a few isolated mega-sales, but also to growing interest in NFTs, crypto and blockchain from the wider public, including artists, creatives, marketers and brands. This is why, even if it has died down a little, 2021’s mania for NFTs has provided the industry with a solid foundation for further growth and adoption.

5. China’s CBDC Trials Reach Big Milestones

Trials by a one-party authoritarian state may not get the cryptocurrency purists all excited, but there’s little doubt that the Chinese government’s intentions to launch a central bank digital currency will prove highly significant for crypto in the long run.

The seriousness of these intentions was underlined by the sheer scale of the Chinese central bank’s ongoing CBDC trial, which by November had involved over 140 million people and transferred a total of $9.5 billion worth of digital yuan.

While no specific date or timeline for a full nationwide launch has been given, it’s clear from the size of the trial that a full launch will happen in the next year or so. And with China gaining a headstart on the rest of the world, other major economies will no doubt aim to follow suit themselves in one way or another.

And as the examples of China and India (another country pursuing a CBDC) have shown, the rollout of central bank digital currencies may go hand-in-hand with restrictive cryptocurrency regulations. Accordingly, the apparent success of China’s CBDC trials may be a bad omen for crypto, which will have to prepare itself to lobby governments as much as it can in 2022 and the coming years.

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CryptoVantage Author Simon Chandler

About the Author

Simon Chandler

Simon Chandler is a journalist based in London. He writes about technology, markets and politics, and has bylines for Forbes, Digital Trends, CCN, Wired, TechCrunch, the Verge, the Sun, the New Internationalist, and TruthOut, among many others. His Twitter handle is @_simonchandler_

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