2021 in crypto: market wrap and some throwbacks
The crypto market this year saw several ups and downs with the sentiment fluctuating widely from the most bullish to extremely depressing. Traders and investors had experienced a very nervous year given the multiple bull runs and subsequent crashes and dips that were unfolding one after another. For some, it was the best year in terms of gains for their portfolios, while for others, especially those who entered the market at the peaks of the bull rallies, it has been a brutal year.
The beginning of the year saw investor sentiment at one of its highest. It continued for quite a while. The faith in cryptocurrencies remained high and the market sentiment was in extreme greed for about four months. Nevertheless, this could not last forever. change not too long after.
The very first notable price crash in the crypto market had happened in May. This continued through most of the summer, bringing traders market-wide dips every now and then, dragging the overall sentiment into more and more negative.
2021 also had some absurd memecoin rallies. It all began soon after Tesla had made its purchase of Bitcoin. Elon Musk began to make frequent tweets about Dogecoin. This would become the spark for several incredible runs that the coin would have shortly after. For example, supported by community memes and regularly appearing Elon’s tweets, the memecoin went on an absurd run in May with doge’s price surging 142% within 24 hours. However, following Musk’s appearance at the Saturday Night Live where he jokingly called the coin “a hustle,” the asset’s price had a quick market-wide crash, soaring by another 200%.
Dogecoin was created by Palmer and Markus in 2013. In an interview six years later Palmer said the idea for the project came from two internet tabs he had opened on his computer at the time, with a viral internet meme of a Japanese Shiba Inu “doge” in one and with a list of the recent cryptocurrency projects on the market in the other.
When asked about his preferences of DOGE over Bitcoin, Musk claimed that “even though” the former was created as a joke it is superior to BTC on transaction volume, and capability. After its creation, it experienced only two short-lived big price jumps during its first almost four years in the market. Renewed interest spurred by Tesla CEO Elon Musk and other celebrity supporters at the start of 2021 sent doge’s price surging past its previous all-time high. The coin posted a 9,884% gain between January and May.
Dogecoin wasn’t the only asset “involuntarily” pumped with his activity on social media. For example, when Musk added the #Bitcoin hashtag to his Twitter profile, the coin rallied up about 11%.
Later, a number of other new coins were inspired by it, including Shiba Inu. During the latest rally, Shiba Inu briefly entered into the top ten crypto by market cap list, and for a certain period even surpassed Dogecoin on it. However, both the coins have slowed down in the past couple of months, and are now out of the top ten crypto list entirely.
2021 also saw the WallStreetBets community making deep option bets on AMC, GME, and CLOV. The rally was accompanied by memes all along the way, and one of the catchphrases used by users was “We Like The Stock.”
In mid-2021, crypto traders turned their attention to “Ethereum killers” and digital art objects aka NFTs that fetched hundreds of thousands of dollars. Many Ethereum competitors in the field of smart contracts blockchains began to raise traders’ keen interest — such as Solana with its SOL token or MATIC by Polygon. The latter rose nearly twofold in July. What concerns NFTs, they became ‘mainstream’ by autumn with crypto-native digital artists minting their own collections and established creators outside of crypto getting involved in the space.
August would market the beginning of another splash of positive sentiment as the market once again dived into green, or bullish territory. This was followed by rallying prices, with a number of assets hitting new all-time highs.
Again, this did not last long as the sentiment derailed back into the negative area following the September’s market crash.
On the whole, despite of all the market fluctuations in 2021, report says that long-term holders have increased their holdings over the past year, taking advantage of any price dips to acquire more of the number one digital asset.