Stocktaking: The biggest winners and losers in the crypto industry in 2021

The cryptocurrency and blockchain industry has experienced explosive growth in 2021, especially in its decentralized finance (DeFi) and non-fungible token (NFT) sectors.

The year was also characterized by continued price volatility, a major experiment in Central America, rising institutional interest, and the rise of some faster smart contract networks — all reflected in this year’s industry “winners and losers.” " on the list.

2021 Winners

Kazakhstan

When China effectively banned bitcoin mining operations in May 2021, Kazakhstan quickly stepped in, sending displaced miners and others to its cheap and plentiful coal supply. Numerous companies operate in the Central Asian country, including the top five crypto mining pools operated by BIT Mining.

In July 2021, Kazakhstan’s average monthly hash rate share was 18.1%, which means it accounted for nearly one-fifth of global Bitcoin mining production, second only to the United States (42.7%), according to the Cambridge Center for Alternative Finance Compared with only 1.4% in September 2019, the increase is astonishing.

It remains to be seen whether Kazakhstan will maintain its share of global bitcoin mining in 2022, given reports of widespread power shortages in the country as winter sets in.

Coinbase

Coinbase Global, the largest U.S. cryptocurrency exchange, listed on Nasdaq on April 14, becoming the first crypto company to list on a U.S. stock exchange. The company closed the day at $328.28, giving it a market capitalization of $86 billion, a stunning first-day performance that has drawn comparisons to the IPOs of Facebook and Airbnb. However, the company's stock price retreated towards the end of the year, trading at $243.35 on Dec. 18, and its market cap remains strong at $52.37 billion.

The Coinbase listing is widely seen as another sign that cryptocurrencies have gone mainstream, with more public offerings to come. Kavita Gupta, founding managing partner at Delta Growth Fund, told Cointelegraph: “Coinbase will be the frontrunner for the entire blockchain community on the public market.”

Solana

2021 will see a wave of new smart contract networks. The largest and fastest-growing of these is Solana, a super-fast proof-of-stake network that can reportedly handle 50,000 transactions per second (TPS). In comparison, Ethereum can process only 30 transactions per second.

"In the history of cryptocurrencies, 2021 may not be a year of greater popularity or faster transaction speed than Solana," wrote Messari's Ryan Selkis, an open-source blockchain that hosts a growing number of NFTs and DeFi project, although it has been hit by several distributed denial of service attacks before 2021. According to data from Cointelegraph Markets Pro, as of Dec. 20, Solona’s native cryptocurrency, SOL, easily ranked fifth among all cryptocurrencies, behind BTC, ETH, BNB and USDT.

Nayib Bukele/El Salvador

El Salvador made history in 2021 by becoming the first country to declare Bitcoin a legal tender. The country’s dynamic president, Nayib Bukele, captivated the crypto world with what he did: using the energy of volcanoes to power the country’s BTC mining, airdropping $30 in BTC to every adult in the country, and The launch of Bitcoin City, a fully functioning city built around Bitcoin and initially funded by $1 billion in Bitcoin bonds, was announced at the end of November.

Only time will tell if this all amounts to an apparent economic "victory" for the people of El Salvador, but it's fair to say that Bukele bought the dips and brought some 21st-century innovation and luster to a poor Central American land heavily reliant on remittances, Remittances are money sent home by foreign workers.

Mike Winkelmann, aka Beeple

In February, Christie’s, the first major auction house to offer purely digital works with unique NFTs, auctioned off a digital collage without even a price tag. Nobody knows how to price it. Mike Winkelmann (aka Beeple)'s "Everydays: The First 5000 Days" sold for $69.3 million, something that may never happen again in the art business.

The work fetched more than works by Georges Seurat, Paul Gauain or Salvador Dalí, and placed the relatively unknown Beeple among the world's highest-paid contemporary artists, including David Hockney and Jeff Koons. It also tells those outside of the crypto world that non-fungible tokens are going to be a force to be reckoned with. The sales of NFT will rise sharply in 2021. At the end of November, "NFT" was declared the "word of the year" by dictionary publisher Collins.

Avalanche is another high-speed smart contract network breaking into the top 10 in 2021. According to CoinGecko, “Solana and Avalanche are the rising stars in the DeFi multichain” with 6% and 2% shares of total value locked (TVL) in Q3. These TVL increases came at the expense of Ethereum, which had almost all of DeFi TVL (99%) at the start of the year. In comparison, Ethereum’s TVL share at the end of Q3 was 76%.

Avalanche’s native currency, AVAX, ranked 10th with a market capitalization of $27.3 billion at the end of December, likely boosted by its agreement with Deloitte to support the consultancy’s work with FEMA.

Sam Bankman-Fried/FTX

In 2021, Sam Bankman-Fried was declared the "richest man in crypto," largely because of his stake in FTX, a cryptocurrency derivatives exchange he founded in 2019.

According to data from CoinGecko, by the end of 2021, FTX has become the second largest crypto derivatives exchange after Binance (futures). Messari called FTX “the fastest growing company ever,” noting that Bankman-Fried built a $25 billion business in less than three years and with fewer than 100 employees.

With participation from SoftBank, Sequoia Capital, Coinbase Ventures, Multicoin, VanEck and the Paul Tudor Jones family, among others, FTX closed a $900 million funding round in July at a valuation up from its previous $1.2 billion to $18 billion. In June, FTX acquired long-term naming rights to the Miami Heat's NBA basketball arena.

OpenSea

The NFT phenomenon has been a boon for digital artists, who can sell their work without agents and brick-and-mortar galleries, but they still need a digital marketplace. OpenSea, a pioneer in the field of NFT art and a leading NFT marketplace, is one of the biggest winners this year.

According to Cointelegraph Consulting, OpenSea charges a relatively low 2.5% commission for each sale on its platform, but it raked in a respectable $79 million in August 2021. As of November this year, the company had revenue of more than $235 million. Come December, not much has changed: “The world’s dominant NFT trading market is making a lot of money,” Messari said.

ProShares ETFs

Something of a hurdle was overcome in mid-October with the launch of the first bitcoin exchange-traded fund (ETF) approved by the U.S. Securities and Exchange Commission (SEC). The ProShares Bitcoin Strategy ETF (BITO) made its debut on the New York Stock Exchange with the second-highest volume opening fund ever, in what some are calling a “watershed moment for the crypto industry.”

Its launch ended eight years of futility by U.S. fund issuers — the Winkelvoss ETF was the first fund to be rejected by the U.S. SEC in 2013 — but some were still skeptical that the breakthrough fund was a futures-based ETF without Disappointed to directly track the price of Bitcoin (BTC). The US SEC clearly preferred two layers of regulatory protection - namely, the Commodity Futures Trading Commission (CFTC) and the US SEC jointly supervised by the US SEC - which was further confirmed a few weeks later when the US SEC rejected VanEck's spot market ETF application.

2021 Losers

Meta (Diem​)

Facebook’s Libra stablecoin project (now Diem), announced to much fanfare in 2019 with a cadre of blue-chip partners, has been delayed and scaled down. Today, one hears very little about Diem, except possibly about departures — for example, Dante Disparte left Diem for Circle, and more recently, head of crypto David Marcus said he would be leaving the company by the end of the year .

Facebook's rebrand to Meta has come under fire from U.S. lawmakers for its "clout" over social media, and a stablecoin project slated to launch in early 2021 could be collateral damage. There wasn't much clarity on any of the events. As The New York Times commented, “The Libra cryptocurrency was eventually renamed Diem, and the company’s crypto wallet effort was called Novi. These gibberish names are often confusing, even to company insiders. exception."

central bank of nigeria

In February, the Central Bank of Nigeria (CBN) ordered all local banks to close the accounts of customers using cryptocurrencies. The CBN governor stated that most crypto accounts are used to finance “illegal” activities such as money laundering and terrorism.

Nigeria is expected to launch a central bank digital currency soon like China, so the CBN may be following China’s lead and clearing all rival cryptocurrency businesses before the CBDC is launched. If so, its efforts have failed utterly.

Not only has the cryptocurrency survived, but by August Nigeria had the second largest Bitcoin peer-to-peer market in the world.

Virgil Griffith

There was a time when Virgil Griffith was a celebrity in the crypto world. The former Ethereum developer and U.S. citizen traveled to North Korea in early 2019 to attend a cryptocurrency conference. In November of the same year, he was arrested in Los Angeles for violating US sanctions laws.

Ethereum co-founder Vitalik Buterin claimed at the time: “I don’t think what Virgil is doing is giving North Korea any real help in doing bad things. He’s speaking based on publicly available open source software information.”

Ahead of his upcoming criminal trial in September 2021, Griffith "admitted conspiring to violate U.S. law by traveling to North Korea to give lectures on the use of blockchain technology to launder money and evade sanctions," according to the Wall Street Journal. He could face up to six and a half years in prison as part of a plea deal. It's unclear what prompted his change of plea.

Iron Finance (TITAN)

Maybe it’s not a good idea to collateralize a stablecoin — such as IRON — with another stablecoin, USDC, and an unknown governance token (TITAN). In this case, the result has been dubbed “the world’s first massive crypto bank run” — specifically, a run on the Iron Finance protocol. The result: In late June, the price of TITAN plummeted from over $60 to a few thousandths of a cent in a matter of hours.

CipherTrace later said the incident was the result of a design flaw: "Iron.Finance lacked proper stabilization mechanisms." But at the same time, some investors lost heavily, including Dallas Mavericks owner Mark Cuban, He called for regulation to determine “what is a stablecoin and what collateral is acceptable.” On December 20, ICE was trading at around $0.002.

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