2021 has been a year like no other. Coronavirus has of course dominated the headlines and all our lives, but the crypto world has endured an equally tumultuous 12 months. Bitcoin has hit all time highs just nine months after crashing 51% in March, while Ethereum 2.0 has begun its launch process after years in development.
Our four-part review of 2021 looks back at the top stories that shaped the cryptocurrency world this year, starting with January-March, which takes in Elon Musk and Tesla taking their first steps into the crypto world, payment giants testing crypto integration, Craig Wright failing to get the Bitcoin whitepaper pulled, an NFT selling for $69 million, and Bitcoin crossing $50,000 for the first time.
Parts two, three, and four will be winging their way to you this week. Enjoy.
Bitcoin started the year at $29,000 following a three-month surge that saw it race from $10,000 in October the previous year, thanks in part to Michael Saylor blazing an institutional trail and buying up bitcoin by the bucketload. Ethereum also broke above $1,000 for the first time in three years in an indication that alts were also set to enjoy the start to 2021. The month would end with a 20% one-day pump thanks to Elon Musk tweeting that “in retrospect, it was inevitable” and adding a Bitcoin logo to his Twitter bio, the initial shot in a battle that would eventually turn ugly.
These price rises, and more across the board, helped the cryptocurrency market cap cross the landmark $1 trillion, an astonishing achievement in such a short space of time.
The new year also saw VanEck reapply for a Bitcoin ETF following several rejections by the Securities and Exchange Commission, marking the first application since 2019.
January brought bad news for Ledger customers who thought they had escaped being one of the 272,000 customers whose personal details were stolen in a data breach in 2020 – Shopify informed the crypto wallet maker that a further 20,000 customers’ details had been stolen, taking the number to 292,000. This news merely worsened an already dire situation, and led to an ongoing PR disaster for Ledger.
This month also saw mainstream media outlets ramp up criticism of Bitcoin in a way not yet seen. The focus was its environmental impact, something that would become a feature of 2021, with the full impact not hitting home until April.
Craig Wright continued his assault on Bitcoin by trying to force websites to take down the Bitcoin whitepaper, claiming they infringed his copyright and, of course, threatening to sue anyone that didn’t. Happily this led to more platforms, including FullyCrypto, ignoring him and instead posting the Bitcoin whitepaper in defiance.
February started with a boost for the often forgotten Bitcoin scaling solution Lightning Network as top exchange OKEx announced that it would use the Lightning Network for all Bitcoin transactions. This would prove to be the first of two major announcements for Lightning Network in 202 that would finally see it reach its potential.
Elon Musk continued his foray into the crypto world by confirming that he was a “supporter of Bitcoin”, which was backed up just days later by Tesla announcing that it had bought an astonishing $1.5 billion worth of bitcoin the previous month. This news added $8,000 to the Bitcoin price within 24 hours, a move that saw it edge ever closer to the milestone of $50,000 mark, which Bitcoin finally crossed on February 16 to much fanfare.
Musk also rallied behind crypto favorite Dogecoin, which enjoyed a 1,000% increase in just one week thanks to Musk’s support and a coordinated buyup from social media groups, which would be another theme that would continue through 2021, although it was clear his manipulation could, and eventually would, work both ways.
Bitcoin wasn’t the only cryptocurrency enjoying the start to 2021 – the entire market was booming. Fears over an Ethereum crash after its futures launched in early February were unfounded as it eclipsed its prior all time high a few days before the Ethereum futures launch.
It wasn’t just crypto prices that were enjoying a purple patch, adoption was on the up and up too. Hot on the heels of the Tesla news, Miami mayor Francis Suarez announced that the city had added bitcoin to their books, a first for a public body in the U.S., while Mastercard announced that it was working on a platform where cryptocurrency holders could spend their crypto at Mastercard terminals without prior conversion to fiat currency first. If this wasn’t big enough news, Bloomberg reported that Morgan Stanley’s investment arm was considering a Bitcoin investment, something that only added to the fervor around Bitcoin.
In a sign that the NFT market was set to be the next crypto craze, the first $1 million CryptoPunk sale was registered, which was followed later in the month by a $6.6 million purchase of CROSSROADS by digital artist Beeple.
A busy February came to a close with the news that Bitfinex and Tether had settled their lawsuit with the New York Attorney General, which some took as proof that criticism of Tether was just FUD, despite the company admitting that its tokens weren’t backed 100% by cash as they had previously claimed.
March began with Bitcoin recovering from a 25% correction following February’s huge gains, with the mainstream media doing its best to bring the price down – a coordinated attack saw Bitcoin criticized by no less than five outlets on the same day. Thankfully not everyone was buying this, as Visa CEO Al Kelly told Fortune that the company was working on Bitcoin integration just weeks after Mastercard announced their own crypto integration plans. The first step towards this move came later in the month when the company announced a trial involving acceptance of USDC tokens at certain payment terminals.
The NFT hype train gained speed in March when Kings of Leon became the first band to release an album as an NFT, news that led to repeats of dismissals of the internet in the early 1990s. Reaction to the Kings of Leon NFT release also showed that the relentless attacks by the mainstream media over Bitcoin’s environmental impact were having the desired effect and turning people against it.
If the NFT train was gathering steam then it almost ran off the tracks when Beeple, fresh from his $6.6 million NFT sale the previous month, went ten times better and sold his epic piece Everydays – The First 5000 Days for a record $69 million at Christie’s.
Too Good to Last
The first quarter of 2021 was seminal for many reasons, with Elon Musk making the first of many impactful steps in the crypto world, Bitcoin crossing $50,000 for the first time, and NFTs finally gaining a mainstream audience. Despite the record prices and mushrooming adoption, the concerns raised and amplified by mainstream media outlets regarding Bitcoin’s energy use were just the start of a bloody battle that would have huge ramifications later in the year.
Check back tomorrow for part two of our four-part review of cryptocurrency in 2021.