Year 2021: The Defining Year Of Cryptocurrency Across The Globe; When Crypto Went Mainstream, 2021: The Year Of Bitcoin
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2021 will be remembered as the year of cryptocurrency for several reasons
From mainstream acceptance, emergence of new digital coins, to challenging central authorities over the notion of ‘currency’, 2021 will be remembered as the defining year of cryptocurrency across the globe. As the world prepares for Web 3.0, people have now been exposed to the idea of adopting the digital ecosystem for currency in the form of digital tokens, instead of cash.
Bitcoin – the world’s oldest and largest cryptocurrency – seized mainstream acceptance with El Salvador, amid its dizzying rally throughout the year. Apart from this, blockchain-based technology gave birth to non-fungible tokens (NFTs) – being non-interchangeable – distinguishing itself from cryptocurrency.
The positive sentiment around crypto around the world has not only encouraged investors but a whole new breed of crypto entrepreneurs with the intention to transform the global financial system. The rise of crypto investors globally testifies the fact that it has emerged as the most popular investment avenue challenging traditional asset classes such as gold, stocks, and real estate.
With major global announcements in the crypto market, 2021 was truly the ‘year of cryptocurrency’. As we near the end of 2021, here’s a list of all important events that helped crypto become a mainstream voice of the future.
Elon Musk’s $1.5 Billion Investment
Billionaire Elon Musk’s electric vehicle company Tesla Inc announced a $1.5 billion investment in bitcoin under its changed policy and announced that it would accept the currency as payment for cars. After Tesla’s announcement in February 2021, bitcoin’s price took a giant leap crossing the $48,00-mark – its largest daily rise in more than three years. Within a week, bitcoin created history crossing the $50,000-mark for the very first time, achieving further mainstream acceptance among large investors, especially after Tesla’s move.
Mainstream Acceptance Vaults Bitcoin Higher
Bitcoin witnessed a broader bull run since October 2020, ever since US-based online payment company Paypal allowed customers to use bitcoin on its network. However, Tesla’s investment became the latest in a string of large investments that vaulted bitcoin to soaring prices, as US firms and traditional money managers started taking the asset seriously.
In the same month, the Bank of NY Mellon announced that it had formed a new unit to help clients hold, transfer and issue digital assets. The world’s largest publicly traded business intelligence company – Microstrategy announced that it would $600 million to buy more bitcoin. The company already owned close to 72,000 coins at the time of its announcement in February 2021, valuing its bitcoin holdings at around $3.6 billion.
Crypto Clampdown In China
In May, the Chinese central government published a memo that stated Bitcoin trading and mining crackdown. By June, power supplies for industrial-scale Bitcoin mining farms in Xinjiang’s Zhundong economic zone and Sichuan were directed to shut down.
Chinese authorities believe cryptocurrency disturbs the economic order and facilitates illegal asset transfers and money laundering. The authorities also blame crypto miners for energy waste, deadly coal mining accidents – which is a potential threat to the country’s efforts to reduce carbon emission.
In September, China’s central bank said all cryptocurrency-related transactions are illegal and must be banned, sending a harsh signal on its determination to crack down on the industry.
In October, the United States officially became the largest hub for Bitcoin mining operations and businesses. China’s crackdown created an opportunity for overseas bitcoin mining operations – leading to an infrastructure boom in North America, Russia, Central Asia, and Europe.
El Salvador Became The First Country To Accept Bitcoin As Legal Currency
In September 2021, El Salvador became the first country in the world to accept bitcoin as legal currency, despite widespread domestic skepticism about cryptocurrencies and international warnings of risks for consumers. President Nayib Bukele’s government claimed the move will give many Salvadorans access to bank services for the first time and save some $400 million in fees on remittances sent home from abroad every year.