Crypto continues to sink into the mainstream

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Crypto has been around a lot in its short history. 2021 was the year he became part of the mainstream.

Elon Muskt spoke about it often. It was parodied on “Saturday Night Live”.

Institutional investors looked for ways to get in and the first bitcoin ETF started trading. Individual traders bought cryptos on their phones when they weren’t buying GameStop Corp.

According to the Pew Research Center, about 16% of the American population owns or has held cryptocurrencies. In 2015, Pew found that only 1% of Americans owned or had held cryptocurrency. The number of people holding cryptocurrencies around the world doubled in 2021 to around 220 million, according to crypto.com.

Crypto prices have remained as volatile as ever. From January to April, the price of bitcoin doubled. From April to July, it fell by more than 50%. It doubled again a few months later, reaching a record high of nearly $ 70,000 in November. As of 5 p.m. ET on Friday, it was trading at $ 46,321.84, still up 60% from its price of around $ 29,000 at the start of 2021.

In percentage terms, bitcoin’s gains actually represent one of its weakest years. In 2020, digital currency grew by over 300%. In dollar terms, however, 2021 was by far the most important year for cryptocurrency.

The total value of cryptocurrencies more than tripled at its peak in 2021, reaching $ 2.98 trillion from less than $ 1 trillion in January, according to CoinMarketCap. It recently fell to around $ 2.2 trillion.

Coinbase Global Inc., which operates the second-largest crypto exchange, went public with great fanfare in April. It has become the largest in a series of crypto-focused publicly traded companies including Galaxy Digital Holdings Ltd., Marathon Digital Holdings Inc., and Riot Blockchain Inc.

Coinbase’s shares, however, have been as volatile as the assets traded on its exchange. After closing at a high of $ 357.39 in November, it closed on Friday at $ 252.37

Two notable new uses of crypto technology have sparked interest in crypto.

The first was NFTs, which are digital tokens like bitcoin but different in that each one is unique. Artist Beeple grabbed the attention of the art world with the $ 69 million sale of a digital image and associated NFT in March. Artists, musicians, celebrities such as Martha Stewart, and companies such as PepsiCo Inc. have all created non-fungible tokens.

NFT’s sales totaled around $ 14.4 billion in the past year, according to nonfungible.com, up from $ 65 million the year before.

The other popular use was decentralized finance, or DeFi for short. DeFi is a broad and catch-all phrase for what is essentially banking services, primarily borrowing or lending of cryptocurrencies, offered on blockchain-based platforms. The total amount of money on DeFi platforms, a figure known as the locked-in total value, rose to $ 243 billion from $ 19 billion at the start of the year, according to the DeFi Llama website.

These two uses have given a boost to the Ethereum network, which operates as an open version of an app platform like Android or iOS. Many DeFi and NFT services run on Ethereum. The network processed more than $ 2 trillion in transactions each quarter of 2021, according to research firm IntoTheBlock. This is triple the amount for the fourth quarter of 2020.

All of this activity has attracted venture capital. The VCs, which first invested in bitcoin in 2013, have invested more money in the sector in 2021 than every two years combined. In the United States alone, venture capital funds invested $ 7.2 billion in the crypto space in 2021, according to data from PitchBook. Globally, venture capital has invested $ 29.4 billion.

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