Over the past year, many important developments have taken place on behalf of the growing crypto industry. We have compiled the 10 most important developments that left a mark on the crypto industry in 2021 for you.
- Elon Musk’s influence on cryptocurrencies
Elon Musk, one of the most talked about names in the crypto market this year, has shared crypto-related posts many times.
In February 2021, Tesla company, founded by Elon Musk, announced that it had purchased $1.5 billion in bitcoins and that they were accepting payments in bitcoin.
These statements made the bitcoin price rise. However, about 3 months after that, he shared that Bitcoin mining pollutes the nature too much, showing that they will no longer be paid with bitcoin, and this time it was one of the reasons for the decrease in the price.
Elon Musk also influenced the meme token price with his constant posts about dogecoin. On May 8, dogecoin rose to about $0.73, hitting an all-time high.
- El Salvador accepts Bitcoin as legal tender
With the law passed in June, the El Salvador government enacted the law that accepts bitcoin as a legal payment instrument, breaking new ground in this area.
- Bitcoin’s market cap exceeds $1 trillion for the first time since it was created
The market cap of bitcoin surpassed $1 trillion on February 19, with institutional investors and financial companies buying bitcoin, led by companies like Tesla, Square, and MicroStrategy.
- Ethereum 2.0 upgrade
With the London Hard Fork in August, the deflationary mechanism EIP-1559 was launched.
Ethereum’s legacy proof-of-work (PoW) method was heavily criticized for requiring too much computing power. With the ETH 2.0 merger, users will switch to the proof-of-stake (PoS) model, a system where users can mine according to the amount of ethereum they own, instead of the currently used mining tools.
After Ethereum, Polygon and Binance Smart Chain also switched to systems similar to this mechanism.
- $600M DeFi theft
The decentralized finance (DeFi) ecosystem, which had a market cap of $1.73 billion last year, has reached nearly $21 billion this year.
In August, DeFi platform Poly Network was hacked, and nearly $600 million worth of cryptocurrencies were stolen from their systems.
Although the hacker, who was stated to be injured by a flaw in the system, later returned the crypto money, this event was recorded as one of the biggest thefts in the crypto money market.
We encountered such incidents frequently in 2021. According to Chainalysis’s report, more than $7.7 billion was stolen in cryptocurrency scams this year.
Artist Mike Winkelmann, known as Beeple, sold his work “Everydays: The First 5000 Days” as a Non-fungible token (NFT) for $69 million in March. This sale was the largest NFT sale ever made. The NFT sector, which became even more popular after this sale, reached historical sales volume with the inclusion of celebrities and blockchain games.
There was NFT before 2021, but according to data from DappRadar, the NFT industry, which reached $23 billion in volume in 2021, had its best year ever.
- China bans cryptocurrency transactions
The Chinese central bank has banned all transactions related to cryptocurrencies.
Miners within the country were forced to relocate as a result of the impact on the miners he pressured throughout the year. According to data from Cambridge University, the USA ranked first among the countries preferred by miners. Cambridge also stated that the hash rate of China, which had 67% of the mining market in September 2020, was reset.
- First Futures ETF launched
In October, ProShares’ futures ETF was approved by the SEC. It is currently traded on the stock market with the BITO code.
The SEC rejected many spot bitcoin ETFs because they found them to be unsafe.
The long-awaited Taproot update for Bitcoin went into effect in November.
Taproot was the first major upgrade since 2017.
With the Taproot update, bitcoin transactions will be faster and less costly.
- US government stance towards crypto
Gary Gensler, head of the Securities and Exchange Commission (SEC), has repeatedly said throughout the year that there should be comprehensive regulation for cryptocurrencies. Fed Chairman Powell and US Treasury Secretary Janet Yellen have repeatedly warned people that cryptocurrencies and stablecoins are speculative and volatile.
In November, US President Joe Biden enacted the taxation system for cryptocurrencies and NFTs.
In addition to the regulations of the USA, another step came from Turkey. President Recep Tayyip Erdoğan announced that they will tax cryptocurrencies.