The Road to Mass Adoption: Major Milestones Hit by Crypto in 2021
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The Road to Mass Adoption: Major Milestones Hit by Crypto in 2021

9 months ago

Let’s relive 2021’s watershed moments as we retrace the steps taken by the cryptocurrency industry towards wider adoption.

The Road to Mass Adoption: Major Milestones Hit by Crypto in 2021

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Following a protracted crypto winter of 2018-19 and the long thaw of 2020, the market has finally managed to find its footing this year. Set against the backdrop of dynamic upward price movement, 2021 has been a year of firsts for the crypto industry.

A number of big-league players have made their entry into the crypto scene, and major crypto companies acquired newfound legitimacy on the traditional markets. Some events have put on display exactly how far the industry has come over the years, while others offered a glimpse into what awaits it in the future.

Let us take a look at the major events of 2021 that have helped put crypto onto everyone’s radar.

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Crypto Market Reaches New All-Time Highs

In a sure sign of their rising popularity, Bitcoin (BTC), along with most other top cryptocurrencies by market capitalization, have hit their new all-time highs this year. After reaching its previous milestone in late 2017, the crypto market had entered a prolonged “winter” with prices of major cryptocurrencies going down by as much as 70% or more over the course of a few years.

That decline had only reversed in the latter half of 2020 when the prices reached their previous record levels — a dynamic that continued into 2021. After a relatively sluggish start this year, by September, the crypto market was well on its way to the new maximums.

In fact, the most recent record high of the market was reached as recently as mid-November: BTC touched $68,622 and Ethereum (ETH) hit $4,844 on Nov. 10, while Binance Coin (BNB) achieved its current maximum of about $666 on Nov. 7. The overall capitalization of the crypto market also peaked out around the same time, reaching about $2.971 trillion on Nov. 10.

While historical price data is not a good predictor for future performance of cryptocurrencies and, by extension, the pace of their wider adoption, it nevertheless does a fairly good job of indicating the popularity that they have managed to amass up to this point — which is more than they’ve ever enjoyed. As for actual cryptocurrency price and usage predictions for the next year, a number of industry analysts have come out with rather optimistic outlooks.

Bloomberg’s senior commodity strategist Mick McGlone predicted a great 2022 for BTC, which should rise against the USD due to the deflationary forces set to affect the latter. Former hedge fund executive at Goldman Sachs went even further and outlined a $250,000-$400,000 target for BTC, expected to be reached by March next year.
And in terms of actual adoption, cryptocurrency exchange Crypto.com is forecasting a whopping one billion crypto users by the end of 2022. If these predictions are just halfway correct, even 2021’s stellar performance is looking to be outshined.
In a historical first, the Central American Republic of Salvador officially adopted Bitcoin as legal tender in September 2021. After the country’s Congress approved the respective bill, spearheaded by the recently elected president Nayib Bukele, it went into effect on Sept. 7, making payments with Bitcoin fully legal throughout El Salvador.

Despite a major supporting campaign that included the establishment of several hundred Bitcoin ATMs and attention centers and an incentive of a $30 equivalent in BTC to every citizen who would begin using El Salvador’s own crypto wallet Chivo, the rollout did not go without a hitch: for one, the app had to be briefly disconnected due to being overloaded with traffic.

Another concern is Bitcoin’s volatility: the cryptocurrency’s surges and dips can routinely reach double-digit percentages in a single day and present a major financial and psychological hurdle for a lot of El Salvadoran citizens who depend on every single dollar in their wages for daily necessities.

To nobody’s surprise, that volatility had made itself felt even on such an important occasion as rollout day, with Bitcoin dropping from around $52,000 down to as low as $42,000 and then retracing most of those losses back to the $50,000 mark, all on Sept. 7 — a thoroughly uninspiring performance in light of such a monumental milestone.
Bukele’s initiative has also resulted in international condemnation from relevant financial institutions. For example, the Governor of the Bank of England Andrew Bailey has warned El Salvador about the risks associated with dealing with cryptocurrencies, while the International Monetary Fund has outright warned the country not to adopt BTC as legal tender.
Nevertheless, El Salvador’s president has so far not been deterred by either the critics’ comments or the objective setbacks suffered by the campaign — on the contrary, he has since then revealed further plans to establish a new “Bitcoin City,” from scratch, at the foot of the Conchagua volcano, whose geothermal energy is set to power the project.

Celebrities Become Really Into NFTs

2021 has been a big year for non-fungible tokens (NFTs), the cryptocurrency tokens that represent ownership of a real-life object or — currently a much more popular use case — a piece of digital art.

NFTs have managed to grow from a novel, poorly-understood concept to an immensely popular, slightly better-understood concept among the general public, which is reflected by how popular they’ve become among both celebrities and large international brands.

On Dec. 9, the soft drink giant Pepsi announced the release of its collection of almost 1,900 images of microphones adorned with various haircuts, items of clothing and facial hair, appropriately dubbed the “Pepsi Mic Drop.”
Not long before Pepsi, the famous beer manufacturer Budweiser had dropped its own NFT collection. On Nov. 30, 1,936 digital tokens were introduced to the world by the company and were sold out in under an hour.
A multinational apparel producer Nike also made its entry into the scene on Dec. 13 this year by acquiring the NFT-focused RTFKT startup whose business is to “merge culture and gaming.” The value of the purchase remained undisclosed, but the company was valued at $33 million during a funding round in May 2021.
Melania Trump, the wife of the former U.S. President Donald Trump, could not pass up the opportunity to make a quick buck while helping out struggling children, so she also released an NFT collection dubbed “Melania’s Vision.” Each token comes with a painting of Trump’s “cobalt blue” eyes and an undisclosed portion of the proceeds from the sale will be spent on helping children who are aging out of the U.S. foster care system.
Even a person who would seemingly be as far removed from cryptocurrency as the famous rapper and entrepreneur Snoop Dogg has seemingly revealed himself to be none other than Cozomo de’ Medici, a Twitter NFT whale with a following of almost 150,000 as of the time of writing — although some have speculated that Cozomo is not Snoop Dogg himself, but rather the rapper’s digital asset manager.

First Major U.S. Bank Offers Clients Access to Bitcoin: Morgan Stanley

In another industry first, Morgan Stanley became the first major United States bank to offer its customers the option of investing a portion of their funds into Bitcoin.

While he did extend a lukewarm acknowledgment that Bitcoin is “not going away overnight,” CEO James Gorman had said in November 2017 that the cryptocurrency did not deserve the attention it was getting, referring to the volatility of its price and its subsequent nature as a highly speculative asset.

In a reversal of that sentiment, Morgan Stanley — the sixth-largest bank in the U.S. by total assets — chose to offer its clients three different funds that enable investment into Bitcoin, starting in March 2021.

Although a clear sign of recognition by the mainstream financial industry, the decision was indeed more of a symbolic gesture than concrete proof of widespread adoption. The new funds will only be available to investors who have parked more than $2 million at Morgan Stanley and have a high risk tolerance — pricing the majority of retail investors out of the opportunity.

The requirements for accredited investors with brokerage accounts are even higher, with a minimum of $5 million under the bank’s management. Moreover, the amount of purchased Bitcoin is limited to 2.5% of any particular client’s net worth.

Considering that the terms put forward by Morgan Stanley are unattainable by most everyday investors, it is a good thing that Bitcoin can be, by design, traded and held by any willing individual with a phone or a computer and access to the internet.

On the flip side, the actual usefulness of the bank’s new funds remains under question, as does the effect of their introduction on the mainstream adoption of cryptocurrency; the doubts were reflected by BTC’s price movement: in the week following the announcement, the coin fell from a high of $58,870 down to about $52,774.

PayPal, Venmo Add Support for Crypto

Well-established and traditionally slow to innovate financial institutions are not the only ones entering the crypto space. This year, Venmo, the dynamic social payments app highly popular in the U.S., introduced the option to buy and sell Bitcoin, Ethereum, Litecoin (LTC) and Bitcoin Cash (BCH) in April this year.

Venmo’s customers can now use the app to buy, store and sell amounts of crypto worth as little as one U.S. dollar. The introduction of cryptocurrency support means that the app’s audience of over 50 million active users is now exposed to digital assets, although as much as a third of Venmo’s customers have reportedly already bought crypto via other means.

In recognition of that fact, the company’s senior vice president Darrell Esch explained in an announcement that the option to buy crypto is targeted at newcomers to the industry. As such, the digital assets can only be bought with Venmo account balances or debit cards, and not credit cards. The amount that can be purchased is also restricted: no more than $20,000 in a single calendar year and a maximum of $50,000 in any continuous 12-month period.

Perplexingly, despite being primarily a payments app, Venmo does not yet allow the transfer of crypto assets between users — only buying from and selling back to the company itself.

PayPal — the company that owns Venmo — has also introduced crypto to its users: in 2020, it enabled the 26 million merchants that use the service to accept the same four cryptocurrencies as payment for their products.

In August 2021, PayPal had extended its crypto services outside of the U.S. by allowing its United Kingdom-based clients to buy, sell and hold a selection of digital assets. According to a report released by PayPal earlier this year, the demand from customers has “greatly exceeded” the company’s expectations prior to the rollout of crypto support.

Crypto Exchange Coinbase Gets Listed on NASDAQ

Yet another first on this list, major cryptocurrency exchange Coinbase began publicly trading after a listing on NASDAQ in April 2021 — the first purely cryptocurrency-focused company to do so directly and not via being absorbed by an already-public firm.
While definitely not the largest crypto exchange — sixth in the world by trading volume as of December 2021, to be precise — Coinbase has a reputation for being one of the most trustworthy ones, in large part due to its strict adherence to regulatory requirements.

For example, it is actually the largest exchange available to customers based in the United States due to the fact that its five larger competitors have so far failed to meet the exacting conditions imposed by American regulatory bodies on crypto businesses.

It should come as no surprise that Coinbase became the first crypto exchange to announce that it is going public in January and conclude a listing in April 2021 on NASDAQ, one of the largest American stock exchanges, second only to the New York Stock Exchange.

The listing has successfully taken place despite a number of controversies, including the company’s apparent mishandling of the PR surrounding the Black Lives Matter protests last year that has resulted in the departure of about 60 of its employees, as well as its significant — according to some — overvaluation at over $100 billion.

At the moment, Coinbase’s stock is trading at $280.27, about 14.6% below its opening price of $328.28 on Apr. 14, following disappointing third-quarter financial results posted by the exchange. Nevertheless, the company’s listing proves that Wall Street is becoming more welcoming to cryptocurrency firms that it used to treat with disregard or even outright hostility in prior years.

Meta (Formerly Facebook) Announces Metaverse

Not only a booming year for crypto, 2021 has also been an eventful one for the social media giant. Facebook, among other things, announced its rebranding to Meta, as well as the creation of its Metaverse — a 3D virtual reality environment for users to socialize and consume entertainment.
While Metaverse is not an explicitly crypto-based platform, the co-founder of Meta’s blockchain-powered payment system Diem David Marcus had said in an Aug. 24 interview that stablecoins will be “vital” to the success of any such project.

Moreover, Marcus said that the company is looking into implementing support for NFTs in its digital wallet Novi, which is based on Diem, which is based on Libra. A December tweet from Meta in response to the Pepsi Mic Drop — which we’ve already mentioned above — has all but confirmed that the company is very much interested in including NFTs into its Metaverse experience:

There are, however, concerns over Meta’s actual implementation of its VR environment. So far there has been little indication that Metaverse will be truly decentralized and user-controlled, making the introduction of blockchain-based assets, whose main advantage lies in the direct ownership they offer, seem almost a pointless gimmick.

Facebook’s terrible track record in terms of user privacy and data protection, among other issues, is likely to cast serious doubt on whether or not Meta is worthy of being entrusted with people’s identities, information and digital assets.

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