Back in January crypto was still an oft-patronised curiosity that people looked on with equal parts bafflement and disdain. As we approach Christmas, it’s fair to say that crypto has well and truly gone mainstream, the sort of wholesale cultural phenomenon that’s drawing in everyone from major companies to sports and movie stars, financial behemoths and entire nation states.
1. Tesla buys Bitcoin
The air was already thick with euphoria when Elon Musk announced in February that his company had purchased US$1.5 billion worth of Bitcoin. Suffice it to say that this, more than any other moment, was what sent crypto into hyperdrive. You could write-off or dismiss hedge fund managers and the occasional celeb jumping on the crypto bandwagon, but one of the world’s largest companies placing Bitcoin on their balance sheet was something else entirely, an event of such magnitude that it literally made crypto impossible to ignore.
2. Beeple sells an NFT for US$69 million
And then a month later a relatively anonymous digital artist by the name of Beeple sold an NFT for US$69 million. The degree of whiplash this news produced in the non-crypto community was, I imagine, akin to sitting inside a truck as it slams into the side of a mountain at relativistic speeds. Crypto is one of my key interests and I could barely tell you what an NFT was; what hope did the readers of the New York Times have?
Nonetheless, the Beeple sale was the starter’s pistol on one of the fastest and most insane gold rushes in human history – everyone remember when somebody paid US$1.3 million for a crudely drawn picture of a rock? – and the beginning of crypto’s first proper cultural backlash. It’s little wonder Collins Dictionary declared NFT to be its word of 2021.
3. The Great Hashrate Migration
China has been “banning” Bitcoin on a roughly quarterly basis since 2013, with an effect that typically ranged from nothing to sweet FA. But when the CCP issued a new decree in May formally banning Bitcoin mining, it soon became clear that this time they actually meant it. Given that, at the time, China accounted for an estimated two-thirds of Bitcoin’s hashing power, shutting down the nation’s mining operations was a not insubstantial matter.
Cue what has been described as the fastest industrial migration in history, as Bitcoin shed roughly half of its hashing power (along with half its price) in the space of a few weeks while the refugee mining operations looked for a new home. Which all seemed pretty cataclysmic at the time, but six months on and Bitcoin’s hashrate recently made a new all-time high, so it seems like the OG crypto is doing juuuuuust fine.
4. SHIB overtakes DOGE
If there was one thing that got more mainstream traction than NFTs in 2021, it was memecoins. While Elon Musk took all the headlines in the first half of the year with his (presumably ultra-stoned) Dogecoin boosterism, it was a literal joke-of-a-joke coin by the name of SHIB that became 2021’s most compelling/ludicrous trade.
Basically DOGE but on Ethereum, SHIB started the year at a price of $0.000000000073 before witnessing a frankly unbelievable (even by crypto standards) 50,000,000% gain – at one point in October becoming more valuable than DOGE itself. To put this in context, if you’d put $10 into SHIB on January 1, you could have walked away with more than $4 million. Now if you’ll excuse me I need to go and scream into my pillow for a few minutes.
5. Bitcoin gets an ETF
Back in July 2013, two fresh-faced upstarts by the names of Tyler and Cameron Winklevoss were summarily laughed out of the building when they applied to have a Bitcoin ETF listed on the New York Stock Exchange. Eight years and approximately a gazillion false starts later, the SEC finally approved a Bitcoin ETF in October – with a catch. The ETF wasn’t allowed to trade actual Bitcoin, only futures contracts.
In classic buy-the-rumour-sell-the-news fashion, the Bitcoin price briefly surged to a fresh all-time high only to collapse in an omicron/inflation-shaped heap. But while there’s plenty of short-term uncertainty surrounding the crypto markets right now, this was proof (if we still needed it) that we’re playing in the big leagues now. Bring on 2022.