Friday, September 22

2021 Retrospective on Bitcoin and Cryptocurrencies

Marked by the arrival of institutions and even a country, without a doubt this was a milestone year for Bitcoin. In addition, other sectors of cryptocurrencies also seized the moment to explode. This is the year 2021 retrospective.

The entry of institutions and individuals, seeing Bitcoin as a store of better value than gold, was one of the main drivers of this heating. Despite this, each sector has its own merit in attracting new users and creating new trends.

Although it is difficult to decide which sectors will be in focus in 2022, it is worth noting that the metaverse is still in its infancy. Besides him, other sectors such as web 3 and DAOs also promise to shake the market. The fact is that cryptocurrencies are increasingly present in our lives.

Historic highs no Bitcoin

After three years of a somewhat subdued market, Bitcoin opened the year 2021 by doubling its December 2017 high and surpassing $40,000 for the first time in history.

A few months later, amid Coinbase’s IPO, Bitcoin hit $64,000 in April. It didn’t take long for the mark to be surpassed again, trading above $65,000 in October. Bitcoin’s current all-time high was achieved on November 10th, when each coin reached US$69,000 in the market.

Taking advantage of the Bitcoin moment, Ethereum followed the same path and, also breaking high strides, reached close to 5 thousand dollars.

NFTs, P2E games and metaverse

Probably the fastest growing sector this year was non-fungible tokens, acronym for NFTs. Used to prove ownership of an asset, whether digital or physical, NFTs have proven they can play a significant role in many areas.

The first is art, in March this year the artist Beeple sold an NFT for R$ 383 million. Later, several companies such as the Brazilian Havaianas and SBT joined the wave, the same goes for football teams.

These NFT arts gained so much demand that even rapper Snoop Dogg turned out to be a collector. Other artists went further and started selling their body parts as NFT.

In addition to growing popularity, Facebook’s name change to Meta has caused the word metaverse to explode. With no clear definition of what metaverse is, many games with open economies began to gain ground, with virtual land trading for millions of dollars in November.

In addition, companies like Nike and Adidas have also gone headlong into the metaverse, even selling virtual sneakers. So did NBA star Stephen Curry.

Play to earn (P2E)-style games, which can also be considered metaverses, have seen surprising highs, both in price and in adoption. The highlight is Axie Infinity, whose AXS token has valued 11,300% this year.


Perhaps one of the most surprising events this year was the adoption of Bitcoin by a country for the first time. On September 7, 2021, El Salvador passed the Bitcoin Law and now the country works with both dollars and bitcoin.

In addition to its day-to-day use, El Salvador is also converting its reserves to Bitcoin and ends the year with 1,400 BTC in cash, equivalent to R$412 million at current prices.

Nevertheless, the country is also using the energy of a volcano to mine Bitcoin, as well as creating Bitcoin City, a tax-free city with the economy revolving around BTC.

Billionaires and their companies have embraced Bitcoin

Certainly 2021 was the year that most talked about Bitcoin. At every interview or opportunity, people wanted to know what billionaires and their companies thought about Bitcoin.

Tim Cook, CEO of Apple, Ray Dalio, founder of Bridgewater Associates, Paul Tudor Jones, founder of Tudor Group, Barry Sternlicht, CEO of Starwood Capital, and Elon Musk, CEO of Tesla and SpaceX, are some of the billionaires who revealed investments in Bitcoin this year.

In addition, we also saw the entry of several large companies into Bitcoin. Tesla bought $1.5 billion of BTC in February, and announced it was accepting BTC as a form and payment, and MicroStrategy continues to buy everything it can and already has 122,478 BTC (BRL 36 billion) in cash.

Other large companies such as Visa, PayPal and Mercado Livre are increasingly open to cryptocurrencies, showing their confidence in the longevity of Bitcoin and its descendants. Banks are also willing to work with Bitcoin, as an example we have Bank of America and Deutsche Bank.

US Bitcoin ETF

Another big Bitcoin achievement was the approval of the first Bitcoin futures ETF in the US. The first such request took place in 2013, taking eight years for the US government to change its opinion on the subject. This speculation made the Bitcoin jump for home two 60 thousand dollars.

With that, two other ETFs were soon accepted in the sequence. Despite this, it was the first to be more successful as shown by its trading volume in its early days.

The wait now is for the US government to release Bitcoin ETFs in cash, as they already exist in other countries. These ETFs allow more companies to have exposure to the BTC.

Cryptocurrencies memes exploded in 2021

More surprising than the NFTs were the memecoins which, in addition to registering huge gains with Dogecoin (DOGE), also caused this new sector to be created for distinguish them from more serious projects.

Even the 15.982% jump between January and May this year, largely due to the influence of Elon Musk, the DOGE found itself in trouble when the Shiba Inu (SHIB) took its place as the largest meme currency on the market.

Due to the huge earnings of these two, hundreds more coin memes were born. Most of them were linked to dogs, like the Brazilian Vira-Lata Finance. In addition to these, even Musk’s mention of a currency that did not exist and was quickly created drew attention to the risks of this market.

I want my salary in Bitcoin

Another issue that stirred Bitcoin was the growth in the number of people who want to receive their wages in bitcoin. NFL star Tom Brady revealed his interest, so does Generation Z.

Like them, some mayors of US cities have also shown the same desire. As an example we have Francis Suarez, Mayor of Miami and also Eric Adams, Mayor of New York.

Because of this, some companies like Coinbase are creating solutions so that salaries are automatically converted into BTC. As an example of this demand, a music distributor, UnitedMasters, has already started to pay its artists in Bitcoin.

Pressure from countries, central banks and the IMF

Unlike El Salvador, China banned cryptocurrency miners from its country in May, until then it was the hub of Bitcoin mining. Later, in September, the ban was tightened, focusing on all sectors linked to cryptocurrencies.

Despite being the most populous country in the world and with a strong economy, Bitcoin responded well to the case. In just a few months, Bitcoin saw its price rise and also its hash rate, both breaking records.

Acting in a similar way, central banks in several countries have issued warnings regarding Bitcoin. As examples we have the BC of Paraguay, Russia, Turkey, United Kingdom and Europe.

In addition, other institutions such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) also criticized Bitcoin. The World Economic Forum (WEF) was more neutral in issuing a long document on digital and crypto currencies.

Despite this, governments have focused on stablecoins, which are most used in everyday life, according to them. This is also accelerating the creation of central bank digital currencies, acronym CBDCs, in several countries, including Brazil and especially China.

Bitcoin Taproot Update

After four years since its last major update, Bitcoin has seen its protocol changes again. Called Taproot, it aims to improve network scalability and privacy.

Bitcoin has not received an update of this size since SegWit in 2017, and if Taproot has as much adoption as the previous update, you can see significant improvements in the privacy of transactions that are now easy to track.

Additionally, Schnorr’s signatures, also introduced in this update, have been under consideration for years. They will improve the Bitcoin language, decreasing the size of transactions with multiple signatures.

Decentralized Finance, DeFi

Decentralized Finance, known by the acronym DeFi, also gained a lot of traction this year. Billed as the fastest growing sector in the cryptomarket in August, thanks in large part to yield farming, which rewards its users.

With that, the sector was also the target of many attacks, with honorable mention for the BRL 3.1 billion of the Poly Network hack and the Compound bug that sent BRL 500 million to its users by mistake. About dozens more projects also had similar problems.

Contrary to what you might think, the DeFi sector remained alive and strong, gaining the interest of Chinese who, after the ban on cryptocurrencies in their country, saw many services close their doors to them.

What to Expect for 2022

In addition to the still strong metaverse, two other trends could shake the market in 2022. The first is web 3, which aims to make the internet more decentralized. The second is the DAOs, Decentralized Autonomous Organizations.

The web 3 movement has barely started and is already being criticized by big names like Elon Musk, CEO of Tesla, and Jack Dorsey, founder of Twitter.

The DAOs, Decentralized Autonomous Organizations, are gradually taking shape and purpose. One of them has tried to round off a US constitution, another is trying to buy Blockbuster, a famous bankrupt video store, to turn it into a movie streaming service.

Finally, regardless of what the future of the internet is, it is quite possible that cryptocurrencies will be present. Outside of it, in the real world, we have the same feeling that Bitcoin will be used more and more in our daily lives.