In terms of price action, cryptocurrencies like Bitcoin (BTC) and Ether (ETH) are ending 2021 with a whimper, confounding expectations for an end-o
In terms of price action, cryptocurrencies like Bitcoin (BTC) and Ether (ETH) are ending 2021 with a whimper, confounding expectations for an end-of-year blow-off top scenario. A six-figure Bitcoin by December became a consensus trade among many analysts, investors and market observers who were expecting the flagship cryptocurrency to replicate its previous four-year cycle.
Although Bitcoin is still a long way off from that coveted milestone, exponential markets require a longer-term view. When we zoom out, we see that Bitcoin continues to print higher highs and higher lows on the yearly chart. We also see significant uptake from both retail and institutional investors who now consider crypto to be a legitimate asset class.
Bitcoin yearly lows:
2012: $4
2013: $65
2014: $200
2015: $185
2016: $365
2017: $780
2018: $3,200
2019: $3,350
2020: $3,800
2021: $27,734Bitcoin HODLers are the floor. They are the revolutionaries that have preserved and grown Bitcoin.
Do you still want to bet against them?
— Dan Held (@danheld) March 15, 2021
Despite the recent downward price action, 2021 was crypto’s big year. Amid all the positive developments we observed over the past 12 months, five stories, in particular, caught our eye as being the most bullish from a business and adoption perspective.
Tesla adds Bitcoin to its balance sheet
Elon Musk’s Tesla Motors sent shockwaves across the crypto community in February when it revealed that it had allocated a sizable portion of its balance sheet to Bitcoin. The company’s final Form 10-K filing for its 2020 fiscal year showed a $1.5 billion allocation to BTC, which represented roughly 7.7% of its gross cash position at the time.
In addition to buying Bitcoin, the company said it was accepting BTC payments for its vehicles, a move that gave crypto whales more reason to splurge on Tesla products. Tesla’s decision not only sent the Bitcoin price soaring but also signaled to other corporations that crypto is a strategic reserve asset.
After winning the hearts of crypto loyalists, Musk would later reveal that his company was halting BTC payments over concerns about the cryptocurrency’s energy usage. He also said Tesla sold roughly 10% of its BTC holdings, but only to demonstrate the coin’s liquidity.
Although these could be taken as negative developments — the crypto community sure thought so at the time — the billionaire also hinted that his company was closer to accepting Bitcoin payments again. Oh, and he says he never offloaded any of his personal BTC bags.
No, you do not. I have not sold any of my Bitcoin. Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
— Elon Musk (@elonmusk) April 26, 2021
El Salvador declares Bitcoin legal tender
The tiny Central American nation of El Salvador made crypto history in June when it became the first country to declare Bitcoin legal tender.
Despite fierce opposition from the likes of the World Bank and International Monetary Fund, El Salvador believes its Bitcoin gambit could help transform its economy by streamlining remittances, promoting financial digitization, and providing consumers with a new vehicle for transactions and savings.
El Salvador has issued its own state-backed Bitcoin wallet, dubbed Chivo, and installed hundreds of crypto ATMs across the country to make it easier for locals to begin transacting with BTC.
Since implementing the Bitcoin Law, El Salvador has been keenly buying the dips on all BTC major price corrections. After its most recent purchase, on Dec. 21, the country now holds 1,220 BTC on its books worth roughly $60 million at today’s prices.
El Salvador’s decision to adopt Bitcoin could have significant ramifications on a region that’s struggling with hyperinflation, fiscal pressures, and economic uncertainty. Although several other Latin American countries are reportedly considering adopting Bitcoin, no other government has followed in El Salvador’s lead yet.
Related: Bank of America outlines 4 potential benefits of El Salvador’s Bitcoin strategy
Crypto becomes a multi-trillion-dollar asset class
While cryptocurrencies are known for their volatility, a longer term view shows a steadily increasing market valuation. In 2021, the cryptocurrency market capitalization set multiple milestones, including crossing the $1 trillion value mark for the first time in early January. It took the crypto market roughly four months to double to $2 trillion before briefly surpassing $3 trillion in early November, according to Coingecko data.
It took the crypto market roughly four months to double to $2 trillion before briefly surpassing $3 trillion in early November, according to Coingecko data.
Crypto’s emergence as a multi-trillion-dollar asset class means more institutional…
cointelegraph.com