2021 In Review: A Year of Progress
2021 was, without a doubt, one of the most pivotal years on record for blockchain and the cryptocurrency industry.
Ranging from the surging adoption of cryptocurrencies among retail, major brands, and institutions, to the dramatic surge of meme coins, NFTs, and blockchain-enabled games, on top of rampant speculation and more than a few major events, 2021 was equal parts crazy and exciting.
As we move into what promises to be another blockbuster year for the blockchain space, we feel now is the time to reflect on the year that legitimized cryptocurrencies in a major way, and arguably set the stage for what could be the parabolic phase of the blockchain adoption cycle.
Let’s dive into some of 2021’s defining moments and events:
Coinbase’s Record-Breaking IPO
Undoubtedly one of the most significant events of not only this year but in general for the cryptocurrency industry was Coinbase’s April 2021 initial public offering (IPO).
After debuting on Nasdaq, Coinbase shares closed the day at $328.28 per share, placing the cryptocurrency exchange as an $85.8 billion valuation. This resulted in significant exposure for the cryptocurrency industry as a whole as the Coinbase app skyrocketed to the number one position on several popular app marketplaces and also increased the overall legitimacy of the space as Coinbase shattered expectations.
Coinbase’s IPO not only put cryptocurrencies on the radar of potentially millions of new investors, developers, and users but also added rocket fuel to the 2021 bull run — sending the price of many cryptocurrencies soaring to their highest ever values.
Despite opening at $381, Coinbase’s share price has now fallen to closer to $250, placing the company’s market cap at $54 billion. Nonetheless, Coinbase will go down in history as the seventh-largest US listing of all time, narrowly edged out by major brands like Airbnb, Uber, Facebook, and AT&T Wireless.
The First Bitcoin ETFs in the U.S. Went Live
Bitcoin ETFs have long been hailed as one of the first stepping stones to institutional adoption of cryptocurrencies, since they provide investors with a regulated investment product that provides exposure to the price action of Bitcoin.
And while several ETFs had already been approved in foreign markets prior to 2021, North America didn’t get its first regulated Bitcoin ETFs until late 2021.
The U.S. Securities and Exchange Commission (SEC) has always been notoriously reluctant to approve any ETF proposals — often citing that the Bitcoin market simply isn’t resistant enough to market manipulation or doesn’t have the necessary checks in place to ensure investors are properly identified and protected.
It wasn’t until October 2021 that the first U.S. Bitcoin ETF finally went live. Known as ProShares Bitcoin Strategy ETF (trading under the ticker: BITO), the ETF allows accredited investors to gain exposure to Bitcoin futures through their standard brokerage accounts. Not long after, the Valkyrie Bitcoin Strategy ETF also went live, becoming the second Bitcoin ETF approved for U.S. markets.
For the first time ever, this allowed individuals and organizations to speculate on Bitcoin through a regulated product in the U.S., and even add it to their retirement accounts.
As we briefly touched on, the ProShares Bitcoin Strategy ETF is a Bitcoin futures ETF, which means users do not actually gain exposure to Bitcoin directly, but rather futures that track its price. Several pureplay spot ETFs are currently being scrutinized by the SEC, and it is widely expected that the first will be approved sometime in 2022.
The launch of the first regulated BTC ETFs in the U.S. arguably helped to fuel Bitcoin’s October to November rally, which saw the cryptocurrency reach its all-time highest ever value of over $69,000 on November 10, 2021.
The NFT Boom
Many would argue that 2021 can be considered the “year of the NFTs” — thanks to the incredible rise to prominence this asset class had over the last year.
Throughout 2021, dozens of major NFT collections were released, including the Bored Ape Yacht Club, MekaVerse, Hashmasks, and more. Many of these went on to garner significant attention and value, and often attracted prominent investors — including the likes of Nike, Visa, and Adidas.
2021 also saw a huge number of record-breaking NFT sales, including the most expensive NFT collection ever sold, known as Pak’s “The Merge” which sold for almost $100 million in December 2021. Likewise, the single most expensive NFT of all time was also sold in 2021. Beeple’s “Everydays: the First 5000 Days” sold for a staggering $69 million through an auction held by Christie’s.
The reasons behind this growth are numerous but can be partially attributed to rampant interest in the play-to-earn sector and the advent of a huge number of blockchain games that pay players for their in-game efforts — many of which require users to hold or use NFTs. Likewise, a large number of popular brands introduced their own NFT collections — including high-end fashion brands, popular traditional video games, fast food and beverage companies, major sporting brands and icons, and more, generating a great deal of exposure for this asset class.
Given the range of new use cases enabled by NFTs, including decentralized identity, more efficient digital rights management, decentralized derivatives, IP crossovers, domain names, and more, NFTs are widely projected to become a pivotal technology in the coming months and years.
Business Adoption Skyrocketed
In the last year, a huge number of prominent firms either dabbled with blockchain technology and cryptocurrencies or launched their own blockchain-based products and initiatives.
Now, as per data from Blockdata, a whopping 81 of the world’s top 100 public companies are now engaging with blockchain technology. This includes tech giants like Microsoft, Alphabet, and Amazon; financial giants like Paypal, Visa, and J.P Morgan; as well as major brands like Walmart, Nestle, Coca-Cola, and McDonald’s.
But few brands had as much impact as Tesla, which famously began accepting Bitcoin payments for its cars in March 2021, shortly after buying $1.5 billion worth of Bitcoin and adding BTC to its balance sheets. Two months later, Tesla backtracked on this move and stopped accepting Bitcoin payments owed to environmental concerns — much to the dismay of the blockchain community.
Other prominent companies also made their foray into the blockchain space in 2021, many of which made began by deploying their own NFT collections and products, or muscled in on the current metaverse boom. Some of the better-known examples include Gucci with its recent NFT-backed crossover with Fortnite, Coca-Cola and its $500,000 NFT charity auction, and Gemini — which took over a billboard in New York City as part of its NFT plans.
It wasn’t just companies getting in on the action either. 2021 will forever be known as the year Bitcoin became known as bonafide legal tender, after El Salvador adopted the cryptocurrency in September 2021.
Dogecoin/Altcoins Exceeded Expectations
Looking back at 2021, some of its most prominent events could be argued as an inevitability — or at the very least, extraordinary likely. Others, however, were almost impossible to predict.
Dogecoin’s meteoric rise is one of them.
Since the beginning of Starting 2021 at a mere $0.0049, Dogecoin went on an incredible rally between January and May, climbing to its all-time highest value of $0.7376 in early May. To put this into perspective, Dogecoin achieved an astounding 14,900% growth in 5 months.
This means anybody holding $1,000 in DOGE at the start of 2021 saw their holdings swell to close to $150,000 at their peak.
Fueled by a massive wave of hype surrounding other newer meme coins, including Safemoon, Shiba Inu, and Dogelon Mars, as well as the large amount of exposure the project received from Elon Musk’s frequent Twitter remarks.
It wasn’t just Dogecoin that saw meteoric growth in 2021 — the altcoin market as a whole also saw incredible growth. In 2021 alone, the market capitalization of all altcoins (that is all cryptocurrencies except Bitcoin) grew from just $230 million to over $1.3 billion — representing growth of more than 500% for the average altcoin.
Nonetheless, many prominent altcoins including Binance Coin (BNB), Solana (SOL), Terra (LUNA), and Avalanche (AVA) smashed these numbers, and were responsible for a large chunk of the growth seen in the altcoin market.
2021 was arguably the year of the layer-1 chains, as a variety of well-known layer-1 platforms, including Terra, Binance Smart Chain, Avalanche, and Fantom saw dramatic growth in their respective ecosystems, with the total value locked across DeFi platforms on all major layer-1 chains smashing successive highs and on-chain transaction activity skyrocketing in tow.
But if there was one blockchain that really took off in 2021, it’s Solana. Despite starting the year at just $1.6, Solana experienced one of the most dramatic price surges ever seen in the blockchain space after reaching a peak value of $260 in early November — equivalent to 16,150% growth in 11 months.
Likewise, the platform saw massive growth in its application landscape. Solana now has a fully fleshed-out DApp ecosystem, with applications spanning across a variety of sectors, including DeFi, gaming, NFTs, and the metaverse.
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As per data from DeFi Llama, Solana’s TVL recently reached in excess of $15 billion — at the time placing it among the top 3 most popular chains by TVL. Since then, its TVL has cooled off slightly, sitting at around $12 billion. Nonetheless, this value is up by a staggering 2,000% in the last six months alone.
Polkadot Poised to Become the Next Big Thing
Since the earliest days of the cryptocurrency industry, there has always been a divide between independent blockchains due to a simple lack of interoperability.
Instead of developing an integrated landscape of cross-platform projects and services, each blockchain went on to develop its own proprietary application ecosystem, with major platforms like Ethereum, Solana, Binance Smart Chain, and Terra achieving considerable success.
But Polkadot promised to change that paradigm, by providing the first truly blockchain agnostic interoperability solution — for the first time allowing value and information to be exchanged across practically any smart-contract capable chain with few to no modifications required.
Since its 2017 ICO, Polkadot has long been hailed as the solution to the blockchain interoperability issue and is arguably poised to enable a huge range of new use cases for developers and users, while breaking down some of the barriers to entry facing new users today — like getting to grips with multiple sovereign blockchains.
The Polkadot mainnet launched in May 2020 and the platform recently opened up its parachain slot auctions — allowing the first wave of projects to deploy on the platform as a parachain. As per data from PolkaProject, there are now well over 500 projects building on the platform, many of which will look to secure their own parachain slot to benefit from interoperability with other projects and platforms.
Given that Polkadot will arguably power the future of the blockchain industry as well as other related industries including the metaverse and Web3, many believe that Polkadot’s native asset (DOT) will appreciate considerably in the near-to-medium future as will many of the projects that help power this revolution. Moreover, with Polkadot shaping up to become the next big thing, we at Master Ventures recently unveiled the Dot Fund — a fund that invests in, stewards and supports the growth of the Polkadot ecosystem.
The Metaverse & Facebook’s Meta
2021 will go down in history as the year the metaverse got its beginnings. As a digital landscape of products, services, and experiences poised to revamp the way we work, socialize, relax, and create, the metaverse is widely expected to become the successor to web 2.0.
In October, the massive social media and technology conglomerate known as Facebook rebranded to Meta Platforms, Inc., or simply Meta. This rebrand along with a multi-billion dollar metaverse budget reflects its focus on building and stewarding the growth of the upcoming 3D version of the internet.
Although Facebook, without a doubt, kickstarted the hype surrounding the metaverse, a huge number of blockchain projects began working on their own metaverse platforms and services, and pre-existing blockchain-enabled products with overlapping features to the metaverse saw significant growth.
Decentraland, The Sandbox, Axie Infinity, Illuvium, and dozens of other major metaverse games and projects witnessed staggering growth in 2021, and demonstrated the rampant demand for open, equitable, expandible, and community governed platforms.
Though the metaverse is still in its very early stages of development, blockchain technologies and cryptocurrencies are quickly being recognized as some of the major pillars that will help to power this vast digital landscape. As such, we are likely to continue to see a surge of innovations made in the blockchain space in the coming years, which will help to further clarify the scope and capabilities of the metaverse and define some of its more revolutionary narratives.
At Master Ventures, we recognize that while the blockchain space remains nascent, its potential is truly astounding. In line with this, we are incredibly excited to see what the future holds for this incredibly diverse, pioneering, human-oriented industry, and can’t wait to do our part in ensuring it develops along the most prosperous path.
About Master Ventures
Master Ventures is a blockchain-focused venture studio helping to build the next generation of blockchain-based Web 3.0 system innovations within the crypto industry. Launched in 2018 by Founder and CEO Kyle Chassé, the company’s ethos can best be summarized in the acronym #BeBOLD: Benevolent, Open, Love, Decentralized.
Master Ventures co-creates with entrepreneurs and businesses worldwide to turn the best ideas into innovative and disruptive products. They do this by investing as strategic partners through offering advisory services to the projects they believe in. To date, Master Ventures has invested in over 40 crypto projects, including the likes of Kraken, Coinbase, Bitfinex, Reef, DAO Maker, Mantra DAO, Thorchain, and Elrond.
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