admin posted: "The year 2021 is coming to a close, and if there's one way to describe how the cryptocurrency industry fared in the past 12 months, it would be momentous growth. Major cryptocurrencies shattered previous records, adoption grew, new sectors sprouted, "
The year 2021 is coming to a close, and if there's one way to describe how the cryptocurrency industry fared in the past 12 months, it would be momentous growth.
Major cryptocurrencies shattered previous records, adoption grew, new sectors sprouted, and novel blockchain use cases made significant breakthroughs.
The Market Insight's latest edition recalls the events covered in past issues as well as deep-dive topics in Cointelegraph Research's industry reports.
DeFi and Altcoins
Two of the top gainers of 2021 were Solana (SOL) and Terra (LUNA). SOL gained 9,500%, while LUNA gained 13,000%. Significant investments and ecosystem growth catalyzed the immense gains for the two tokens. One could also argue that the two being billed as potential "Ethereum killers" had a part in contributing to their massive rallies.
In the decentralized finance (DeFi) scene, the two tokens sit among the top five in total value locked (TVL). Solana is at number five with $11.45 billion, and LUNA has recently surpassed Binance Coin (BNB) for the number two spot with $18.9 billion, according to Defi Llama. Moreover, the emerging ecosystems of Solana and Terra deserve a deeper look, which is why they are the subject of Cointelegraph Research's upcoming reports.
DeFi followed a similar growth trajectory as the broader crypto market in 2021.
Competition has undoubtedly increased for Ethereum. Its TVL share was 97% in January but is currently down to 62.54%, per Defi Llama. The next phase of development for the sector comes into question in 2022, especially since the growth of DeFi this year has been so substantial that authorities have switched from denying the industry to grappling with ways to deal with it.
The DeFi market capitalization remains a small fraction of the overall cryptocurrency market cap, but it underwent the same growth trajectory. Some believe that integration with legacy banking could be one of the main focuses for DeFi in 2022.
NFTs
Nonfungible tokens, or NFTs, found their breakout year in 2021 despite existing since 2014. The bulk of sales came in the past 12 months, surpassing $14 billion in December. Digital art collections and digital collectibles dominate 91% of these sales volumes, which is one of the key data revealed in this report.
The sales in the first half of the year were driven primarily by individual artists joining the space with their respective collections and some high-profile sales, while the second half brought in more mainstream brands.
For instance, Coca-Cola auctioned a wearable bubble jacket skin in Decentraland, and Visa purchased its first NFT. Such participation from these brands enabled the NFT market to come into full bloom. The report also revealed that the most profitable NFT collection in 2021 was "CryptoPunks." A "CryptoPunk" NFT offers a better all-time average return on investment compared to NFTs on other popular collections, such as "CryptoKitties" and "Bored Ape Yacht Club."
NFTs have also disrupted the gaming industry and become key to fully realizing the concept of metaverses through their blockchain properties. However, some critics doubt that the parabolic surge in 2021 will play out in 2022, especially with more regulatory scrutiny.
Nonetheless, this year's amount of venture capital investments funneled into NFT companies is beyond sizable. NFT funding in 2021 is already at $2.1 billion as of Q3, yet nearly 40% of VC deal activities involve only a single firm in Andreessen Horowitz, according to PitchBook. Therefore, as sales and interest for NFTs continue to grow, it may be difficult for firms with a thirst for high growth potential to resist NFTs.
Regulation
2021 has been progressive in the cryptocurrency regulatory front. The 117th United States Congress has introduced 35 bills that focus on cryptocurrency regulation, blockchain policy and central bank digital currencies. Federal Reserve Chair Jerome Powell expressed his views about cryptocurrency as not a significant threat to the U.S. financial market's stability. However, a likely discussion that could seep into next year is the regulation on stablecoins.
The President's Working Group on Financial Markets has stated in a report that stablecoins could be a beneficial alternative payment option but are "subject to appropriate oversight." Currently, there are no regulations on stablecoins, even as their market capitalization passed $162 billion as of this writing, but a bill proposed by Wyoming Senator Cynthia Lummis could be a step in that direction.
Lummis plans to introduce a comprehensive bill in 2022 that will provide regulatory clarity on stablecoins, guide regulators around asset classes, and offer consumer protections. Cryptocurrency regulation will be a talking point in 2022 and will also be a topic that the Cointelegraph Research team will be examining further.
GameFi
It is almost certain that everyone in the space agrees that Axie Infinity revolutionized gaming. The play-to-earn model was a massive hit, as it added real income potential to playing video games. Data shows how play-to-earn decentralized applications (DApp) dominated the latter half of 2021 in terms of connected, unique, active wallet addresses. And since September, gaming tokens such as The Sandbox (SAND), Axie Infinity (AXS), Enjin (ENJ), Illuvium (ILV), and Ultra (UOS) have even beat out Bitcoin in gains, as revealed in this newsletter's previous issue.
The gaming sector took the helm from DeFi that saw the most addresses connected in the first seven months of the year. The two DApp categories birthed a new sector, GameFi, which is believed to be the next logical step in blockchain development. Crypto-based games already enable users to have control over their in-game assets via NFTs, but the elements of DeFi could take it to another level. Incorporating DeFi would mean that features such as staking would be available to users where they can earn interest in their tokens.
Yet, the sector is still in its early stages, but its appeal lies within its attractiveness to users who may not necessarily be cryptocurrency holders. Attracting such users could further contribute to more cryptocurrency adoption, which will likely be its focal point for GameFi in 2022.
Adoption
With the developments in 2021, cryptocurrencies were able to captivate a much broader audience compared to the year before. In just the second quarter, global adoption has grown 880% since 2020, Chainalysis data shows. And the key events mentioned above are likely contributing factors to cryptocurrencies going more mainstream. The NFT venture capital activities stated earlier represent only 7% of the $30 billion poured into crypto-related investments in 2021.
But despite the apparent growth, cryptocurrency ownership remains relatively low. TripleA estimates the global cryptocurrency ownership rate to be at an average of 3.9%. Ukraine, Russia and Venezuela are the top countries with at least 10% of their population owning cryptocurrencies.
The low ownership rates imply substantial room for growth, which is why a CAGR of 60.8% from 2021 to 2026 for the cryptocurrency market may have some merit. This year, the value of the cryptocurrency market has already grown from $364.5 billion last year to more than $2.5 trillion — a 586% surge. And in the coming year, the new sectors in GameFi and perhaps assets related to Web3 could possibly be new avenues for continued growth.
Tokenization of certain securities could also happen on a much larger scale, and it is even predicted to be the norm by 2030. Furthermore, the prevalence of cryptocurrencies for payments could also be another area with untapped potential, which will be explored further in another upcoming report.
Predicting what sectors in 2022 are poised for the same breakthrough that NFTs had this year would be difficult, if not, impossible. However, reports that carefully study and go in-depth about certain topics would offer a better way of understanding the nuances of a specific sector.
Cointelegraph's Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. The newsletter dives into the latest data on social media sentiment, on-chain metrics and derivatives.
We also review the industry's most important news, including mergers and acquisitions, changes in the regulatory landscape, and enterprise blockchain integrations. Sign up now to be the first to receive these insights. All past editions of Market Insights are also available on Cointelegraph.com.
admin posted: "Today, Whale Alert has indicated several large XRP transactions as the crypto token remains under $1. At the time of writing, XRP maintained a 24-hour range of $0.83 and $0.86 on CoinGecko. 177,149,680 #XRP (149,186,279 USD) tra"
Today, Whale Alert has indicated several large XRP transactions as the crypto token remains under $1. At the time of writing, XRP maintained a 24-hour range of $0.83 and $0.86 on CoinGecko.
With that being said, one of the major transfers was 177,149,680 XRP tokens worth around $149,186,279 that was transacted between unknown wallets. Before that, a similar transaction worth around $151,262,681 took place which moved 177,149,701 XRP tokens.
Also, two major transfers were made to exchanges, namely FTX and Bithumb. Where, crypto exchange Gopax made a 50,083,908 XRP transfer to FTX, and in another transfer, 70,000,000 XRP were transferred internally between Bithumb.
Meanwhile, all exchange trade volume is estimated to be close to $ 650 million at press time.
We should also reiterate that XRP has been unable to sustain a bull rally in the last four months to reach a new ATH. As the coin remains under $1, XRP has returned 298.6% in the last year. As its monthly and weekly returns are both unimpressive at over -15% on CoinGecko.
"Ripple's strongest year ever"
Despite XRP's sluggish price action and a lawsuit with the SEC, Ripple CEO Brad Garlinghouse recently called 2021 its strongest year. He noted in a series of tweets that,
"Proud to say it was @Ripple's strongest year ever (XRP-based On-Demand Liquidity payments account for 25% of $ volume across RippleNet, and ODL txns are up 25x from Q3 2020, and 130% QoQ)."
Apart from that, he also looked back at the year as a time when 'acceptance and awareness' around crypto was the clearest in the global financial community. He added,
"It's been incredible to see a lot less 'maximalism', and many more builders joining the industry."
However, Arcane's recent analysis for XRP is not all bright. It noted in its 2022 prediction that XRP will fall out of the top 10 cryptocurrencies by market cap, along with Cardano.
With that being said, let's also look at Ripple's co-founder and its first CTO, and also the founder of Stellar, Jed McCaleb's wallet balance. There have been no sales since August and the balance reportedly remains 709,911,634 XRP on the live charts. Meanwhile, his "tacostand" wallet is officially missing in action.
admin posted: "Bitcoin (BTC) and the broader cryptocurrency market turned lower later in the day on Dec. 31, erasing intraday gains to cap off a highly successful year on a weaker note. Market UpdateBTC price fell below $46,000 on Dec. 31 and was last seen hovering"
Bitcoin (BTC) and the broader cryptocurrency market turned lower later in the day on Dec. 31, erasing intraday gains to cap off a highly successful year on a weaker note.
Market Update
BTC price fell below $46,000 on Dec. 31 and was last seen hovering below that level, according to data from Cointelegraph Markets Pro and TradingView. The flagship cryptocurrency is down over 5% from its intraday peak and 2.9% on the day to trade at $45,933.
Bitcoin's price is back on the defensive as the year draws to a close. Source: Cointelegraph Markets Pro
Altcoins faced a similar downward trajectory as Bitcoin, with the likes of Ether (ETH), Binance Coin (BNB) and Solana's SOL each falling more than 2%. Cardano's ADA declined over 4% on the day.
The combined market capitalization of all cryptocurrencies shed over $100 billion from its intraday peak, falling from a high of $2.4 trillion to $2.27 trillion, according to CoinGecko.
The crypto market cap was down more than $100 billion from its intraday peak. Source: CoinGecko
The sudden reversal followed a modest relief rally for BTC and other cryptocurrencies that took place early on Dec. 31. As Cointelegraph reported, Bitcoin's price appreciated by more than $1,500 in less than an hour — a rally that may have been aided by a December options expiry event worth roughly $6 billion.
Bitcoin is bracing for a year-to-date return of less than 60%, which is well below what many, if not most, prognosticators were calling for at the start of 2021. Although BTC never came close to achieving lofty six-figure valuations, the leading cryptocurrency continues to attract investors with a low time preference. (Investors with a low time preference place more emphasis on their financial well-being in the far future as opposed to the present.)
BTC's recent price correction has been largely driven by so-called crypto tourists who entered the market in the summer. As Cointelegraph recently reported, veteran holders are still selling record-low amounts of BTC as of late December. Meanwhile, buying activity on Coinbase appears to have picked up substantially toward the end of the year.
Earlier this week, UTXO Management analyst Dylan LeClair said "The true OGs are holding tight," in reference to Bitcoin's long-term holders having a much lower on-chain cost basis than those who are currently selling. The average on-chain cost basis for long-term BTC holders is $17,825 compared with $33,890 for those currently spending their coins.
#Bitcoin long-term holders have an average on-chain cost basis of $17,825, but the ones currently moving spending their coins have a cost basis of $33,890.
In addition to the retail-oriented class of long-term hodlers, the crypto market saw an influx of sophisticated institutional investors in 2021. Net proceeds into crypto funds exceeded $9.3 billion in 2021, with Bitcoin accounting for over two-thirds of that total, according to CoinShares data. These funds registered 16 consecutive weeks of inflows through Dec. 13.
