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2021: the year crypto went mainstream

LONDON: Cryptocurrency investments are not for the faint of heart – Bitcoin had another volatile year, rising from $ 29,405 at the beginning of the year to as high as $ 67,554 in November, trading at $ 50,908 on Friday.

However, 2021 was the year more people were exposed to the world of cryptocurrencies than ever before. Most notably, El Salvador was the first country to adopt Bitcoin as legal tender, while in a tremendous development for the financial markets, it also traded the first exchange-traded fund tied to Bitcoin futures.

It has caught the attention of regulators heavily. Treasury Secretary Janet Yellen was asked about Bitcoin for confirmation at her hearing. The chairman of the Securities and Exchange Commission (SEC), Gary Gensler, called it the “Wild West”.

At the beginning of the year, around $ 25 billion was invested in decentralized financing projects such as decentralized exchanges and credit / lending platforms. Now it’s $ 100 billion.

The market c -italization of the top five stablecoins – Tether, UDS Coin, Binance USD, Terra USD, and Dai – is $ 152 billion.

Central bank digital currencies (CBDCs) have advanced, bringing real-time payments one step closer.

At the top is China’s digital yuan, which emerged from the test phase and is due to be presented for the Beijing Winter Olympics in February. While it’s not the first country to have a CBDC – the Bahamian Sand Dollar came first – China’s project has spurred other central banks and now 87 institutions, including the European Central Bank and the Bank of England, are investigating their own.

However, US Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell have yet to be persuaded of the need for a digital dollar.

China is also setting itself  -art from crypto markets by banning crypto trading and mining, forcing companies and investors to relocate en masse to other countries.

Nonfungible tokens (NFTs) made the le – into the mainstream with the $ 69 million sale of artist Beeple’s NFT collage at Christie’s in May. Since then, sports brands, including soccer and basketball clubs and brands like Adidas, have stepped in with their own tokens that allow ownership of digital images and videos.

The US cryptocurrency exchange Coinbase launched its IDO – an initial direct offering similar to an IPO, but without a financial middleman – on the Nasdaq in  -ril, making it the first company in the crypto industry to do so without a reverse merger, known as the exchange went a SPAC.

The industry most at risk from the surge in cryptocurrencies is the financial sector, so it is remarkable how many banks have started dipping their toes in the market this year. Large banks and other financial institutions began offering crypto investments to wealthy customers while dealing with real-time payments from custody services with cryptos or CBDCs.

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