In terms of price action, Cryptocurrencies like Bitcoin (BTC) and Ether (ETH) are ending 2021 with a sigh, confusing expectations of a year-end highs scenario. A six-figure Bitcoin for December became a consensus trade among many analysts, investors, and market watchers who expected the flagship cryptocurrency to replicate its previous four-year cycle.
Although Bitcoin is still a long way from that coveted milestone, exponential markets require a longer-term view. If we enlarge the image, we see that Bitcoin keeps printing higher highs and lows on the yearly chart. We also see significant uptake from retail and institutional investors, who now consider cryptocurrencies to be a legitimate asset class..
Bitcoin yearly lows:
2012: $ 4
2013: $ 65
2014: $ 200
2015: $ 185
2016: $ 365
2017: $ 780
2018: $ 3,200
2019: $ 3,350
2020: $ 3,800
2021: $ 27,734Bitcoin HODLers are the floor. They are the revolutionaries that have preserved and grown Bitcoin.
Do you still want to bet against them?
– Dan Held (@danheld) March 15, 2021
Annual Bitcoin Lows:
2012: USD 4
2013: USD 65
2014: USD 200
2015: USD 185
2016: USD 365
2017: USD 780
2018: $ 3,200
2019: $ 3,350
2020: $ 3,800
2021: USD 27,734Bitcoin HODLers are the ground. They are the revolutionaries who have preserved and made Bitcoin grow. Do you still want to bet against them?
Despite recent downward price action, 2021 was crypto’s big year. Amid all the positive developments we have seen in the last 12 months, five Stories, in particular, caught our attention as being the most bullish from a business and adoption perspective.
Tesla adds Bitcoin to its balance sheet
Elon Musk’s Tesla Motors caused quite a stir in the crypto community in February when it revealed that it had allocated a sizable chunk of its balance sheet to Bitcoin.. The company’s final Form 10-K filing for its fiscal 2020 showed an allocation of $ 1.5 billion to BTC, representing approximately 7.7% of its gross cash position at the time.
In addition to buying Bitcoin, the company said it was accepting payments in BTC for its vehicles., a move that gave crypto whales more reason to splurge on Tesla products. Not only did Tesla’s decision send the price of Bitcoin skyrocketing, it also showed other corporations that cryptocurrencies are a strategic reserve asset..
After winning the hearts of cryptocurrency loyalists, Musk would later reveal that his company was stopping BTC payments due to concerns about the cryptocurrency’s energy use.. He also said that Tesla sold about 10% of its BTC holdings, but only to demonstrate the liquidity of the coin.
Although these facts could be considered negative – the cryptocurrency community surely thought it at the time -, The billionaire also hinted that his company was closer to accepting Bitcoin payments again. Oh, and he says he never sold his BTC.
No, you do not. I have not sold any of my Bitcoin. Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
– Elon Musk (@elonmusk) April 26, 2021
No. I have not sold any of my Bitcoin. Tesla sold 10% of its holdings essentially to test Bitcoin’s liquidity as an alternative to keeping cash on balance.
El Salvador declares Bitcoin as legal tender
The small Central American nation of El Salvador made history in June by becoming the first country to declare Bitcoin legal tender..
Despite fierce opposition from entities such as the World Bank and the International Monetary Fund, El Salvador believes its Bitcoin gambit could help transform its economy by streamlining remittances, promoting financial digitization, and providing consumers with a new vehicle for transactions and savings..
El Salvador has issued its own state-backed Bitcoin wallet, nicknamed Chivo, and has installed hundreds of cryptocurrency ATMs across the country. to make it easier for residents to start transacting with BTC.
Since the implementation of the Bitcoin Law, El Salvador has been buying enthusiastically during the dips of all major BTC price corrections. After its most recent purchase on December 21, the country now has 1,220 BTC on its order books, worth roughly $ 60 million at current prices.
El Salvador’s decision to adopt Bitcoin could have major ramifications in a region struggling with hyperinflation, fiscal pressures, and economic uncertainty.. Although other Latin American countries are considering adopting Bitcoin, no other government has followed El Salvador’s lead.
Cryptocurrencies become a multi-billion dollar asset class
Although cryptocurrencies are known for their volatility, a longer-term view shows an ever-increasing market valuation. In 2021, the crypto market capitalization marked multiple milestones, including crossing the $ 1 trillion value mark for the first time in early January..
It took about four months for the cryptocurrency market to double to $ 2 trillion before briefly surpassing $ 3 trillion in early November., according to Coingecko data.
The emergence of cryptocurrencies as a multi-billion dollar asset class means that more institutional investors are planning their entry into the market. Existing crypto-focused investment managers have also seen demand for their products rise., with net asset flows in digital asset products exceeding $ 9.3 billion in 2021, according to data from CoinShares.
Financial institutions and other corporations are also transacting cryptocurrencies at a higher rate; Europe emerged as the largest crypto economy and Asia also witnessed significant growth, according to blockchain analytics firm Chainalysis.
Bitcoin ETFs Approved
The bull market of 2017 culminated in the launch of Bitcoin futures contracts by CBOE and CME, which gave institutional investors new ways to gain exposure to the digital asset. Four years later, Investors can now buy and hold Bitcoin through various exchange-traded funds, or ETFs.
In the first trimester, Canada saw the debut of two funds – the Purpose Bitcoin ETF and the Evolve Bitcoin ETF – that provide direct physical exposure to the digital asset..
The debuts were a resounding success, as the Purpose Bitcoin fund accumulated more than $ 1.3 billion in assets in less than two months.. Fast forward to the end of the year, Fidelity Canada has launched a spot Bitcoin ETF that is expected to attract more investors to the digital asset market.
SEMI-SHOCK: Fidelity launching a spot bitcoin ETF in Canada this week. Didn’t know about this. Will easily be the biggest asset manager to date with a bitcoin ETF. pic.twitter.com/H2XJRBY3O6
– Eric Balchunas (@EricBalchunas) November 30, 2021
SEMISHOCK: Fidelity launches a spot bitcoin ETF in Canada this week. I did not know, I did not know it. You will easily be the largest asset manager to date with a bitcoin ETF.
Regulators in the United States have been far less progressive in their approach to digital assets. Although the Securities and Exchange Commission declined to greenlight a spot Bitcoin ETF in 2021, regulators did approve two futures-linked Bitcoin products that many in the industry took as a major milestone..
The ProShares Bitcoin Strategy ETF became the first BTC fund approved in the United States in October. Soon after, the Valkyrie Bitcoin Strategy ETF hit the market. Then in November, VanEck launched its own Bitcoin Strategy ETF in the United States.
Venture capital arrives
Perhaps the most bullish indicator of all for cryptocurrencies in 2021 was the wave of venture capital that flooded the market. Dozens of cryptounicorns were crowned this year as startup valuations soared above $ 1 billion.
Amber Group, Bitso, Blockchain.com Blockstream, BlockFi, CoinList, CoinSwitch Kuber, ConsenSys, Figure Technologies, Fireblocks, OpenSea, 2TM and others joined this exclusive list thanks to highly successful private funding rounds.
In the first ten months of 2021, venture capital had funded $ 17 billion worth of crypto and blockchain-focused startups, more than triple the number in 2020., according to data from PitchDeck.
The advent of venture capital means that smart money has identified cryptocurrencies and blockchain technology as big growth themes. Of course, if you’re Jack Dorsey, that’s not necessarily a good thing:
https://t.co/YaEO5tLlWl
– jack⚡️ (@jack) December 21, 2021
Nevertheless, The fact that venture capital firms splurge on blockchain startups, regardless of where we are in the market cycle, is a sign that the sector is maturing. It’s also a gentle reminder to all those who survived the ICO mania that their initial hunch about investing in crypto was probably correct. After all, they are ahead of Silicon Valley.
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