2021: Cryptocurrency's Year of Institutional Adoption
While prices may steal the headlines, here is a small sampling of what else was happening with cryptocurrencies over the past year.
If it was to be summarized in a phrase, 2021 was the year of institutional adoption for cryptocurrencies. Yet, most of the headlines were just about the soaring (and crashing) value of bitcoin, ethereum, dogecoin, and the like. While price changes themselves are certainly part of the story, it’s also interesting to look at what might have motivated the changes. Therefore, I put together a brief timeline of some of the events from the last year.
2021 in (Brief) Review
January 8, 2021: Bitcoin Reaches an All-Time High of $40,642.15
January 13, 2021: ECB President Christine Lagard Calls for Regulating Bitcoin’s “Funny Business”
Just days after bitcoin reached a new all-time high, European Central Bank President Christine Lagarde called for “global regulation” of cryptocurrencies. As noted by Reuters, “Lagarde did not provide specific examples of money laundering cases but said she understood there had been criminal investigations into illegal activity. She did not elaborate.”
January 29, 2021: Robinhood Limits Cryptocurrency Trading
Robinhood’s decision to limit cryptocurrency trading amidst soaring prices (and unprecedented trading) was mostly a reflection of the company and the regulations brokers are forced to comply with. However, the event served as an important reminder of the difference between holding cryptocurrencies via a broker and doing so with a self-hosted wallet.
January 30, 2021: India Considers Banning All Cryptocurrencies to Make Way for a CBDC
The Indian government released a bill that would simultaneously create a central bank digital currency (CBDC) and prohibit the use of private cryptocurrencies.
February 5, 2021: Bitcoin Resists Government Seizure
John O’Donnell reported that German prosecutors “confiscated” more than $60 million worth of bitcoin that a man gained by installing software on computers to mine bitcoin without getting consent from the owners. Although the man served more than two years in jail, he did not give up the password and thus left prosecutors without access to the funds.
The decision to mine this way was a poor one and gives a bad image for cryptocurrencies in general, but this does provide a good example of the protections provided for individuals. A traditional bank would have turned over full access before the man was even in jail.
February 8, 2021: Tesla Buys $1,500,000,000 of Bitcoin
In what would prove to be a landmark moment for institutional adoption, Tesla bought $1.5 billion worth of bitcoin and began accepting bitcoin as payment for vehicles.
February 11, 2021: BNY Mellon Announces Cryptocurrency Services
BNY Mellon, the oldest U.S. bank, announced it will soon provide cryptocurrency storage and transfer services as well as its own digital assets.
February 12, 2021: Miami, Florida Approves Proposal for City to Pay and Receive Cryptocurrency
As reported by Karen Pierog, “The [Miami] city commission late on Thursday approved in a 4-1 vote a first step in the mayor's proposal to allow bitcoin to be used to pay city workers and for city residents and businesses to make fee and tax payments with the cryptocurrency.”
February 12, 2021: Nigeria Cracks Down on Cryptocurrencies
The Central Bank of Nigeria ordered all accounts involved with cryptocurrencies to be closed.
February 16, 2021: Bitcoin Reaches an All-Time High of $50,603
February 18, 2021: Nvidia Announces New Chips for Mining Ether
In an announcement, Nvidia formally turned its attention to cryptocurrencies. Although the company was built with gamers in mind, a new series of products were being designed specifically for the cryptocurrency mining community.
February 18, 2021: Bitcoin ETF Debut in Canada
While U.S. regulators were deliberating over several filings for a Bitcoin ETF, Canadian regulators gave Purpose Investments Inc. the green light to launch the Purpose Bitcoin ETF in Canada.
February 20, 2021: Ether Reaches an All-Time High of $1,915.46
February 21, 2021: Bitcoin Reaches an All-Time High of $57,489.16
February 22, 2021: Treasury Secretary Yellen Calls Bitcoin “Extremely Inefficient”
After bitcoin reached a new all-time high, Treasury Secretary Janet Yellen issued a warning stating, “To the extent [bitcoin] is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”
February 23, 2021: Square Buys $170,000,000 of Bitcoin
“The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis,” the company said in its earnings release.
February 24, 2021: MicroStrategy Buys $1,030,000,000 of Bitcoin
After making its first bitcoin purchase in August 2020, MicroStrategy bought another $1.03 billion worth of bitcoin.
March 1, 2021: Goldman Sachs Restarts Cryptocurrency Desk
With cryptocurrencies gaining unprecedented attention in 2021, Goldman Sachs decided to re-launch its cryptocurrency trading desk.
March 2, 2021: TaxBit Receives New Wave of Support
TaxBit, a company specifically designed to help with filing taxes on cryptocurrencies, received a new round of funding as the company continues to decode the U.S. tax code’s cryptocurrency requirements.
March 8, 2021: Paypal Purchases Curv, a Crypto Security Company
Paypal purchased Curv for $200 million in a move to “accelerate and expand” its support of cryptocurrencies and digital assets.
March 13, 2021: Bitcoin Reaches an All-Time High of $61,181.38
March 17, 2021: Morgan Stanley Becomes First Big Bank to Offer Clients Access to Bitcoin Funds
In an internal memo, Morgan Stanley (an investment bank) told its financial advisors that it would be launching access to three bitcoin funds. Employees said the move came after clients demanded exposure to cryptocurrencies.
March 19, 2021: Brazil Approves Bitcoin ETF
The Brazil Securities and Exchange Commission approved the country’s first Bitcoin ETF, following Canada’s lead.
March 24, 2021: Fidelity Unveils Bitcoin ETF
U.S. regulators rejected a number of ETF applications since Canada approved North America’s first bitcoin ETF in February. However, the latest application came from none other than Fidelity Investments.
April 13, 2021: Bitcoin Reaches an All-Time High of $63,588.22
April 14, 2021: Coinbase IPO
April 16, 2021: Turkey Bans Cryptocurrency Payments
Turkey’s central bank banned the use of cryptocurrencies for payments out of concern over the anonymity and market risks involved. However, interestingly, the ban was only for payments. Turkish citizens are still free to own cryptocurrencies.
April 20, 2021: Venmo Expands to Cryptocurrency
Venmo became the latest company to adopt cryptocurrency. However, the payments service did so by allowing users to buy and sell four different cryptocurrencies.
May 4, 2021: S&P Dow Jones Turns to Cryptocurrency
The S&P Dow Jones Indices launched an S&P Bitcoin Index, an S&P Ethereum Index, and an S&P Crypto Mega Cap Index. "Traditional financial markets and digital assets are no longer mutually exclusive markets," said Peter Roffman, global head of innovation and strategy at S&P Dow Jones Indices.
May 7, 2021: Citigroup Considers Cryptocurrency
After rising demand from clients, Citigroup confirmed they were looking into providing cryptocurrency services.
May 11, 2021: Ether Reaches an All-Time High of $4,179.81
May 12, 2021: Elon Musk Reverses Stance on Bitcoin
In a Twitter post, Elon Musk announced a suspension of Tesla’s acceptance of bitcoin after citing concerns over energy consumption.
May 13, 2021: Sotheby’s Auction House Accepts $12,900,000 in Cryptocurrency for Art
Sotheby’s had previously confirmed that they would accept bitcoin and ether as payments, but the sale of a Banksy piece marked their first acceptance of cryptocurrency.
May 19, 2021: Well Fargo Begins Cryptocurrency Strategy
As reported by Reuters, “Wells Fargo & Co said on Wednesday its investment institute is planning to evaluate and onboard an actively managed cryptocurrency strategy for its wealthy clients, the latest move by a major U.S. bank toward accepting digital currencies.”
May 21, 2021: China Called for a Crackdown on Cryptocurrency Mining
In a statement, officials said, “We should crack down on bitcoin mining and trading activities and prevent individual risks from being passed to the whole society.” While the call was somewhat informal, it was a clear warning for cryptocurrency companies in the country.
May 28, 2021: Sheetz Accepts Cryptocurrencies as Payment
Sheetz (a gas station and convenience chain) announced that it would accept cryptocurrencies as payment for all transactions.
June 7, 2021: U.S. Government Seizes $2,300,000 of Bitcoin Paid in Colonial Pipeline Hack
In a testament to bitcoin’s transparency, the U.S. government was able to track down the majority of the ransom funds paid in the Colonial Pipeline hack. While official statements were not released regarding the strategy employed, it is most likely that they simply followed the trail of payments on the public blockchain and then used forensic methods to identify the wallets.
June 9, 2021: El Salvador Makes Bitcoin Legal Tender
In a world-first, El Salvador officially adopted bitcoin as legal tender. The law still has issues that fail to uphold the values that inspired bitcoin’s creation, but there is no denying this was a historic move.
July 7, 2021: Visa Partners with Over 50 Cryptocurrency Companies
As reported by Isabelle Lee, “Visa on Wednesday announced that it is partnering with over 50 cryptocurrency companies including FTX and Coinbase to allow clients to spend and convert digital currencies through its card program. The partnership will make it easy for clients to convert and spend digital currencies at 70 million merchants worldwide, even those that do not accept digital assets.”
July 20, 2021: Bitcoin Hits All-Time Low for 2021 at $29,789.90
July 27, 2021: Senator Warren Urges Treasury to Crack Down on Cryptocurrency
Senator Elizabeth Warren (D-MA) called on Treasury Secretary Janet Yellen to “act with urgency” and get the Financial Stability Oversight Council to investigate the risks of cryptocurrencies.
July 27, 2021: Amazon Denies Rumors About Accepting Bitcoin
Although Amazon did announce a job listing for a blockchain lead, it denied the suggestion that it would soon accept bitcoin as payment.
August 3, 2021: SEC Chair Gensler Seeks Power to Regulate Crypto
In a speech, SEC Chair Gary Gensler said, “Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West. We have taken and will continue to take our authorities as far as they go.”
August 19, 2021: Bitcoin Mortgages
United Wholesale Mortgage, the second biggest wholesale lender in the United States, made the announcement in a press release: the company would begin accepting bitcoin for home loans and soon move to other cryptocurrencies.
September 9, 2021: Mastercard Plans to Purchase CipherTrace
Mastercard announced a plan to purchase Ciphertrace, a cryptocurrency company that is focused on security and anti-fraud measures.
September 24, 2021: China Cracks Down on Mining and Trading
In a move that formalized past statements, China officially banned cryptocurrency mining and trading.
October 1, 2021: El Salvador Begins Mining with Volcano Energy
El Salvador began mining bitcoin with thermal energy acquired from a volcano.
October 13, 2021: United States Becomes Global Destination for Crypto Mining
After China cracked down on cryptocurrencies, mining companies were forced to leave the country. While miners went to many locations across the globe, the United States became the new global leader in mining.
October 19, 2021: Bitcoin Reaches an All-Time High of $66,999.00
October 21, 2021: Houston Firefighters Invest in Bitcoin and Ether for Pension Plan.
Adding on to the “year of firsts,” a pension fund for firefighters in Houston, Texas became the first public pension plan in the United States to invest in cryptocurrencies. Of the fund’s $4 billion in total assets, $25 million is now held in an unspecified amount of bitcoin and ether.
October 25, 2021: Mastercard Prepares to Integrate Cryptocurrencies
Mastercard announced that cryptocurrencies would soon be compatible with its services.
November 5, 2021: NYC and Miami Mayors Paid in Bitcoin
Both Eric Adams, Mayor of New York City, and Francis Suarez, Mayor of Miami, pledged to receive their upcoming paychecks in bitcoin.
November 8, 2021: Ether Reaches an All-Time High of $4,818.97
November 15, 2021: Infrastructure Act
The signing of the Infrastructure Investment and Jobs Act marked one of the largest attacks on cryptocurrency in the United States.
November 17, 2021: LA Staples Center Renamed After Crypto.com
The Staples Center in Los Angeles, California was bought and renamed the Crypto.com Arena.
December 8, 2021: Crypto-CEOs Testify Before Congress
Leaders from six cryptocurrency companies testified before the House Financial Services Committee.
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Have a suggestion of something that should be added to the list? Let me know in the comments!