Bitcoin Nears $70,000, Memecoins Rally, and China Cracks Down on Cryptocurrency in 2021

Cryptocurrency nearing $70,000 (approximately Rs. 5,211,600), billion-dollar “memecoins,” a spectacular Wall Street IPO, as well as a broad China crackdown: Even for the turbulent sector’s norms, 2021, was the craziest year yet for bitcoins.

A year began with a rush of the capital of both major and small investors pouring into digital assets. Since then, Bitcoin and its ilk have seldom been out of the news, having crypto terminology well established in the investment vernacular.

Those are some of the key cryptocurrency themes that influenced the year.
Cryptocurrency has always been the most popular cryptocurrency.
Bitcoin initial cryptocurrencies retained their position as the largest and best property, despite a slew of new entrants vying for its title.
From January 1 to mid-April, Bitcoin rose over 120 percent to a new high of about $65,000 (approximately Rs. Rs. 4,839,600). A flood of wealth from investment firms fueled it, as did increased adoption by large firms like Tesla and Mastercard, as well as a growing welcome by Large Banks.

As record-breaking stimulus packages fueled soaring prices, Bitcoin’s touted inflation-proof properties – it has a restricted supply – piqued market interest. The prospect of quick returns during historically low mortgage rates, as well as better accessibility with rapidly building the infrastructure, drew purchasers in.
Coinbase’s $86 billion (approximately Rs. 640344.82 crores) IPO last April, its largest by a cryptocurrency startup to date, was emblematic of Bitcoin’s mainstream acceptance.

“It’s progressed to the point in which it’s exchanged by the same types of individuals that gamble on treasuries and stocks,” said Richard Galvin of crypto fund Digital Capital Asset Management.

Despite this, the coin residual energy. It fell 35% in May until skyrocketing to a new all-time high of $69,000 (approximately Rs. 5,137,500) in November when pricing in Europe and the United States spiraled out of control.

There are still doubters, including JPMorgan CEO Jamie Dimon labeling it “worthless.”
Memecoins are now on the upswing.
Because although Bitcoin remained the go-to cryptocurrency for newcomers, a slew of new – and some might say ridiculous – cryptocurrencies flooded the market.

“Memecoins,” a loose collection of coins with origins in online culture ranging from Dogecoin to shiba inu to squid game, generally have a little functional function.

Dogecoin, a Bitcoin offshoot founded in 2013, rose over 12,000 percent to an all-time high in May before plummeting about 80% by a semi. Shiba Inu, which is named after the same Japanese dog breed as Dogecoin, temporarily entered the top ten cryptos.
This memecoin craze was also tied to the “Wall Street Bets” movement, in which ordinary investors banded together purchasing companies like GameStop Corp, putting pressure on fund managers’ short holdings.

Even while authorities warned about volatility, many traders – frequently left at home with ample cash during coronavirus lockdowns – resorted to cryptocurrency.

“It’s really about financial deployment,” Joseph Edwards, head of research at crypto broker Enigma Securities, explained.
Although commodities such as DOGE and SHIB are totally speculative in nature, the money flowing towards these is motivated by the impulse of “why shouldn’t I gain on my money, savings?”

This (big) elephant in the room is legislation.
When wealth flooded into cryptocurrency, officials were concerned about its aim to facilitate financial fraud and jeopardize the world’s economic integrity.

Longtime skeptics of crypto – a rebel technology created to challenge conventional financial – regulators have urged for greater oversight of the industry, with just some caution customers about instability.
Trading volumes were wary of the possibility of a crackdown as new restrictions loomed.

After Beijing imposed restrictions on cryptocurrency in May, Cryptocurrency plunged over 50%, pulling the entire market down with it.

“Uncertainty is important,” said Stephen Kelso, head of global markets at ITI Capital. “Those are the rules of the road that people live by and die by in financial services.” “The regulators are progressing well; they’re starting to catch up.”
When memecoin shopping became popular, another previously unnoticed aspect of the cryptocurrency space gained prominence.

In 2021, the popularity of non-fungible tokens (NFTs), which are strings of code recorded on the blockchain digital ledger and indicate unique ownership of artworks, films, and even tweets, skyrocketed.

Digital artwork by US artist Beeple was one of the three highest valuable paintings by a living artist sold at Christie’s in March, fetching over $70 million (approximately Rs. 521339 crores).
This acquisition sparked a rush for NFTs. Their 3rd sales were $10.7 billion (approximately Rs. 79690.39), an increase of more than eight-fold over the previous three months. Pricing for certain NFTs soared so swiftly when volumes peaked in August that speculators could “flip” them for profit in days if not hours.

The bubble was fueled by rising crypto prices, which generated a new generation of crypto-wealthy investors, as well as expectations for a future of online virtual worlds where NFTs take center stage.

According to John Egan, CEO of BNP Paribas-owned research company L’Atelier, the prominence of cryptocurrencies and NFTs may be linked to a decline in social mobility, with younger people drawn to their potential for quick gains as traditional assets like houses become out of reach due to rising rates.
While some of the world’s most well-known businesses, including Coca-Cola and Burberry, had offered NFTs, the lack of uniform supervision has kept bigger customers away.

“In the next three years, I don’t envisage a situation where regulated financial institutions are actively and aggressively trading (these) digital assets,” Egan said.

Please follow and like us:

Related Articles