An overview of all the major events that have shaped the cryptocurrency industry in 2021
Satoshi Nakamoto published the Bitcoin Whitepaper and mined the genesis block almost two decades ago. Today, a quarter of the world’s population has invested in cryptocurrencies as a source of livelihood, others as a side hustle, and some as a replacement for the distrusted traditional finance. Since the start of the year, crypto has witnessed growth at an exponential rate.
Crypto Highlights in 2021
It has been an incredible year for the entire cryptocurrency industry. With more institutions stepping in, digital assets have moved mainstream more so than ever before. In this article, we replay all the important events that have shaped the performance of digital currencies. More importantly, it will also give us a glimpse on the future of digital assets in 2021 and beyond.
On March 17, 2021, Morgan Stanley became the first big banking institution in the United States to provide cryptocurrency services to wealthy customers. The bank created a bitcoin fund and divided them into three types depending on their risk tolerance. However, the fund demands aggressive risk tolerance among the investors.
On March 30, 2021, Paypal announced a checkout feature for the United States users to seamlessly convert Bitcoin, Ethereum, Litecoin, and Bitcoin cash into the US dollar when making payments for purchases. This eventually allowed customers to spend their cryptocurrencies across millions of online merchants globally.
On April 24, Goldman Sachs announced the creation of a Bitcoin Fund that would be availed to wealthy clients. This move was meant to boost the adoption of crypto by institutions. The company was also going to help wealthy clients invest in virtual currencies through the private wealth management department.
Visa, on March 2021, announced it would start processing payment in the cryptocurrency USD stablecoin - a digital currency whose value is tethered to the United States Dollar. Visa launched the feature in partnership with Anchorage and Crypto.com.
The largest custodial bank globally, Bank of New York Mellon, on 18 March 2021 invested in Fireblocks, a cryptocurrency custody company that is a market leader in the provision of secure technology. The bank had made an announcement early in the year that it would offer Bitcoin and crypto custodial services. Purchasing Fireblocks would strengthen the company’s position as a custodian for virtual assets.
JP Morgan announced back in April that it was researching cryptocurrencies clearinghouse options, aiming to back the idea of third-party services sitting between traders and Over the Counter desks to increase market liquidity and ensure smooth trading activities.
Tesla and Musk Crypto Ventures
Tesla Inc announced in march their decision to begin accepting BTC as payment. The automobile company would then hold Bitcoins regardless of their volatility and related solvency risks. Around this time, Tesla CEO Elon Musk invested $1.5 billion in BTC to further boost and diversify the company’s portfolio. However, a few days by the end of May, Musk delisted BTC as a mode of payment for the automobile company resulting in a decline of the coin’s price. On 11 May 2021, Musk posted a survey on his Twitter profile asking respondents whether Tesla should accept Dogecoin as a payment method.
As of January 2021, there were approximately 15,000 Bitcoin ATMs across the world. All of which accepting and procession withdrawals, deposits, and conversions services for cryptocurrencies. On May 28, 2021, Sheetz became the first convenience store to accept payment in crypto.
On 18 February 2021, Canadian regulators approved the first Bitcoin Exchange-traded fund (ETF) launch in North America. The Canadian ETF is the product of Purpose Investment and would be traded on the Toronto Stock Exchange as security.
China ramped up its crackdown on crypto trading and exchange activities in the country on May 21, 2021. The crackdown announcement said it was important for regulators to smoothen activities around foreign exchange markets, stock, and debt collection. Besides, it also mentioned the need to crack down on illegal digital securities activities and punish any culprits.
Square Inc, Coinbase, and Fidelity announced they would be forming The Crypto Council for Innovation to serve the industry’s crucial needs in policymaking, regulation, and adoption across the world.
DeFi, Institutional Adoption, and Crypto Mainstream
Blackrock, in January, added two BTC futures for part of its funds as a way of allowing diversification of income opportunities for its investors. Both funds are the BlackRock Global Allocation Fund and the BlackRock Strategic Income Opportunities.
As of May 30th, the combined total value of locked funds on the three leading NFT DeFi platforms hit $4 billion. These platforms include SushiSwap, Curve Finance, and Uniswap. However, the amount of locked funds in 2020 was only $558 million on all DeFi platforms.
Venmo, on 20, April 2021 announced it would be adding a cryptocurrency feature on its platform. Thereby joining plenty of companies around the world accepting digital currencies as payment.
Major trading applications such as Robinhood and Revolut experienced a surge in trading activities and volumes. For example, Robinhood published a report indicating 6 million accounts funded with crypto had been opened between January and February of 2021.
Facebook is expected to launch its rebranded digital asset Diem in 2021. Previously known as Libra, the works behind the project have been in progress since 2019. However, hitches resulting from regulators, supervisors, and central banks across the world delayed its completion.
This year has witnessed lots of institutionalization of cryptocurrencies and increased involvement of regulators and policymakers. This could be attributed to increased research across the blockchain and the recent bitcoin bull run to $60K.
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