The cryptocurrency market during Q2 of 2021 was one of dramatic highs and gut wrenching lows, with Bitcoin hitting $65,000 before crashing 50%, Safemoon going one (or rather, several) better, that China mining ban, John McAfee committing suicide, and El Salvador making a very special announcement.
Part two of our four-part review of crypto in 2021 looks at what happened between April and June, with parts three and four coming over the next two days. If you haven’t read part one of our 2021 review yet you can do that here. Let’s go!
April
April began with former BitMEX CEO Arthur Hayes pleading not guilty to conspiring to circumnavigate U.S. laws requiring the implementation of money-laundering controls. Hayes, who had technically been on the run for six months when he flew to Honolulu to hand himself in, where he was released on a $10 million bond pending a court appearance in 2022.
While Bitcoin started April in a very positive mood, it was BNB that was getting all the headlines, rocketing from $286 to $636 within two weeks at the start of the month, based off the success of the Binance Smart Chain, which was seeing some of its projects, most famous among them Safemoon, putting in four-figure returns.
Bitcoin would hit what turned out to be the top, at least for now, in mid-April, reaching $65,000 on the day that Coinbase’s COIN stock was listed on Nasdaq. COIN plummeted on its listing, but not before the owners could dump their shares for huge profit, an action that would act as a portent for Bitcoin itself in the coming weeks.
If there was one coin that dominated April however, it was Dogecoin. The crypto favorite, empowered by Elon Musk’s perpetual tweets and a combined effort from TikTok and WallStreetBets to get it to a dollar saw it put on almost 10x in April alone, going from $0.05 to $0.45 in just two weeks. This led to imitations coins like SHIB making even bigger runs the dog meme played out to its full.
Cryptocurrency was riding a wave of good news, despite mainstream media outlets trying their best to dampen the mood, and more good news came when Venmo announced that they were following PayPal into the crypto market, meaning their customers could buy and sell on the platform, marking another step in adoption for the masses.
The second half of April saw a brutal drawdown on Bitcoin as it fell from $65,000 to $47,000 in the space of 11 days, leading some to suggest the bull market was over. Bitcoin had other ideas however and renounced strongly, ending the month at $57,000.
May
May began positively enough, with the CEO of retail giant eBay saying that the company was “keeping an eye” on cryptocurrencies and may be open to accepting them in the future.
VanEck filed for the first U.S. Ethereum ETF in May following their resubmission for a Bitcoin ETF four months previously. The subject of a Bitcoin ETF was suddenly the talk of the town again three years after the first major discussions on the matter, with several institutions suddenly battling it out to be the first to be awarded one.
Bitcoin’s unstoppable rise continued elsewhere as UBS, Goldman Sachs, and Citigroup all making plans to dip their toes into the crypto waters within the space of a couple of weeks. This positivity wasn’t reflected in the price however as Bitcoin endured one of its all too familiar stomach churning drops following its high of $65,000 in April, falling 51% in the space of two weeks, including a one-day 31% collapse.
The collapse was predicated by China announcing a genuine ban on cryptocurrency mining in the country and Tesla criticising its environmental impact. Many, naturally including mainstream media outlets, reveled in Bitcoin’s collapse, which of course brought the whole crypto market crashing down with it, but the move was hardly surprising given its meteoric run from $3,500 14 months before.
Worse was to come for Bitcoin in May however – Binance was criticized by regulators worldwide and hit with a IRS and US Justice Department investigation, Tether’s $42 billion USDT empire was found to be backed by just 3.87% in cash reserves, the U.S. Treasury announced plans to tighten tax laws around crypto in order to rake in some of the $600 billion of annual lost tax, and the new head of the SEC Gary Gensler finished it off in style by saying that he planned to regulate cryptocurrency exchanges as a priority.
The crypto crash didn’t seem to affect the burgeoning NFT market however, with Christie’s selling nine cryptopunks for $14.5 million and eBay announcing plans to sell NFTs on its website. There would be more where this would come from in 2021.
June
There was only one story in June – El Salvador president Nayib Bukele announced his intention to have Bitcoin accepted as a second currency. The astonishing news, which horrified global financial regulators and other governments, delighted the Bitcoin community. A vote just days later cemented the plan, with Bitcoin set to be signed into law three months later.
With Bitcoin having crashed to $30,000 in May, it was clear that the next few weeks were going to be quiet ones – Bitcoin was either going to lick its wounds and recover or it was in a bear market. Either way, it was going to be a quiet summer.
Craig Wright’s vehicle BSV rebranded horribly in June, with Calvin Ayre fumbling through the announcement, calling the new BSV “BS…B…BSV Enterprise Utility Blockchain or However You Want to Phrase The Words”.
June made it clear that the China Bitcoin mining ban was working, with the hashrate dropping at its fastest rate ever and anecdotal evidence of miners being forced to shutdown and move away.
There was room for another bout of cryptocurrency-related headline news in June when John McAfee, just hours after being told he would be extradited to the US to face various charges of financial crime, comitted suicide in his Madrid police cell. The shock news allowed crypto users to reminisce over McAfee’s shameless ‘coin of the week’ promotions in 2017, amongst his other wonderfully strange behaviour.
Regulations were back in the headlines towards the end of June when the UK press delighted in the announcement from the FCA that Binance had been banned in the UK. except it wasn’t true – Binance UK had been prevented from launching. Nevertheless, Binance was still forced to suspend GBP withdrawals, much to the ire of British users.
Bitcoin had started the month at $36,000 and ended it at an almost identical price, seeing highs of $41,300 and lows of $28,800 in between. Caution was the watchword, with plenty predicting a further collapse to $20,000 before long.
The Rollercoaster of Crypto
Q2 of 2021 will be remembered for the highs of Bitcoin’s all time peak of $65,000 and the lows of China and Elon Musk doing their best to bury it. The news that El Salvador was planning to make it legal tender was a fascinating end to the quarter, with no one quite knowing how, or whether, it was going to work out.
Check back tomorrow for part three of our four-part review of cryptocurrency in 2021.
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