2021 was a year for the record books as the total market capitalization of the cryptocurrency market hit $3 trillion in November sending digital assets such as Bitcoin and Ethereum to all time highs approaching $69,000 and $4,900 respectively.
Cryptocurrency found its “killer application” and entered the mainstream through the advent of NFTs and the Metaverse. $41 billion was spent on NFTs in 2021, up from $100 million in 2020. Companies such as Sothebys, the almost 300 year old auction house, joined the foray with NFT sales accounting for $100 million in 2021.
The Metaverse pioneered new experiences and provided a glimpse into what the next decade holds. Decentraland hosted the first music festival in the Metaverse featuring artists such as Deadmau5, Paris Hilton, and Nina Nesbitt. For investors participating in the goldrush into virtual real estate, one plot of land sold for a record $2.43 million in Decentraland. Some investors are comparing the virtual land grab to purchasing real estate in Manhattan during the 1800s.
Government adoption of cryptocurrency commenced as El Salvador became the first country to adopt Bitcoin as legal tender. Citizens woke up the next day with the ability to purchase their McDonalds and Pizza Hut with Bitcoin. Mayor Suarez made strides towards making Miami the crypto-capital of the United States. Miamicoin launched in August and has since generated over $21 million in revenue for the city. Mayor Suarez plans on paying residents a “bitcoin yield” and hopes Miamicoin helps to create “a city that runs without taxes”.
In 2021, 87 countries representing 90% of global GDP were considering launch of a CBDC, up from 35 countries in May 2020. The European Central Bank announced the development of a digital euro which will eventually be used among the 19 members of the eurozone. Mexico plans on increasing financial inclusion with the launch of their CBDC in 2024.
What historic milestones will 2022 bring to the cryptocurrency market?