Crypto Market Capitalization Grew by More Than 3 Times to $2.4 Trillion in 2021

EthereumEthereum
$1,836.75
‑3.02%
medium.com4m ago

2021 saw the crypto industry continue to scale new heights, extending momentum from 2020.

While an end of year dip may have dampened spirits, overall industry market capitalization grew by >3x in 2021 to close at ~$2.4 trillion, briefly reaching an ATH of $3 trillion.

Bitcoin ended the year at ~$48,000, down from its ATH but still representing a 2x increase during the year. However, its dominant market position has waned, falling to below 40% at the end of 2021.

Much attention has shifted to Ethereum, its many forks and L2 chains which claim to fix its scalability issues, as well as new L1 chains such as Solana and Terra. Pour one out as well for meme coins which seem to have captured their own following.

DeFi projects continued to innovate in 2021, bringing new features with each new version upgrade, as well as new decentralized models of finance altogether.

DeFi also successfully branched out from Ethereum onto other chains, quickly becoming “table stakes” for any network. Overall, TVL in DeFi protocols rose to $234 billion, showing healthy growth.

The killer app for crypto in 2021 though was undoubtedly NFTs. Outsized sale prices, participation from well-known artists, and Axie Infinity firmly vaulted crypto into mainstream consciousness, bringing in a new wave of users to the space.

Total traded volume for NFTs in 2021 reached $23.9 billion, capping off a banner year for this new asset class.

It’s impossible to talk about NFTs without also mentioning the metaverse. Facebook’s rebranding to Meta dominated headlines and generated a million think pieces on the next evolution of the internet, the elusive Web 3.0, while also at the same time attracting more talent and investments than ever before into the space.

With broad acceptance that an open metaverse will not be possible without NFTs and blockchains, expect both to continue to flow into the industry.

And if you thought that was all, let’s not forget related developments “off-chain” in 2021. While the cautious optimism which met Gary Gensler’s appointment as SEC Chair quickly evaporated, it also led to the approval of US Bitcoin ETFs.

Coinbase’s IPO and the crypto investments of MicroStrategy and (briefly) Tesla continued to garner attention and coverage from traditional media, but perhaps none more so than Bitcoin becoming legal tender in El Salvador.

In China, the government continues to expand its e-RMB CBDC experiment, with a wider rollout expected soon, while at the same time cracking down on cryptos and crypto-mining, triggering the great mining migration out of China.

— — — — — — — — — — — — — — — — — — — — — — — — — — — —

Feel free to clap and follow us if you like our article.

LuckyHash (mobile) is the world’s leading one-stop crypto asset management platform. It provides no-pledge mining hashrate leasing and cryptocurrency interest generating plans.

Create a LuckyHash account here and leave your account in comment to receive a free 1000USDT-7d saving account product.