2021: The Year of Crypto
Here in the U.S., we just celebrated Thanksgiving and kicked off the holiday season that lasts through December.
This is a time of reflection, where we look back at the year to see how far we’ve come and take stock of all the things we’re grateful for.
In light of that sentiment, I think it’s time to take a look at how the crypto market has performed year to date.
Those of you that have been in the market for a while now have seen tremendous gains in Bitcoin and many other cryptocurrencies.
Indeed, the total market cap of crypto has grown from $765,000,000,000 to over $2,550,000,000,000 in one year, or 233% year to date.
And, earlier this month, the crypto market cap broke above $3 trillion for the first time.
But market cap growth doesn’t cover all the bullish developments we’ve seen in 2021 …
The biggest one being adoption.
Bitcoin is in the process of becoming mainstream. It is no longer laughed at by the powers at be. Traditional finance and regulators are taking this industry seriously now, simply because they must; it's that large.
Case in point? We have now seen a Bitcoin futures exchange-traded fund (ETF) approved in the United States.
But with great adoption comes calls for regulation. Securities and Exchange Commission Chair Gary Gensler has been loud in his calls to bring crypto under centralized regulations.
Along with new adoption comes new adopters. Previously, any increase in adoption meant retail investors. Bringing in institutional investors was a mythical accomplishment that mostly just crypto evangelists dreamed of.
Now it’s a reality. Big names with deep pockets and big followings have shown up in impressive numbers this year and bought in. The list includes Tesla (Nasdaq: TSLA), MicroStrategy (NYSE: MSTR), Visa (NYSE: V) and plenty others.
Even companies that aren’t adding crypto assets to their balance sheets are still making crypto-positive changes, like accepting crypto as payment. Microsoft (Nasdaq: MSFT), PayPal (Nasdaq: PYPL) and Etsy (NYSE: ETSY) are just a few examples that have taken this step, validating cryptos as legitimate currency.
While most of these investments and opportunities are limited to Bitcoin right now, it’s a bullish start. We believe that once Bitcoin is overleveraged, investors will start looking at altcoins as their entrance into crypto.
The biggest takeaway is that crypto isn’t just retail investors and crypto fanatics anymore.
How else has this market changed recently?
Well, compared to the last bull market, we now have a much more robust decentralized finance (DeFi) ecosystem across multiple Layer-1 and Layer-2 smart-contract protocols.
These protocols are what allow transactions with no middlemen and no need to trust or even know the person on the other side.
It also led to the explosion of decentralized applications (dApps) that offer lending, borrowing, liquidity pool services and other ways to earn yield.
Translation: Investors now have a multitude of ways to profit from their investments beyond capital gains.
Even better, you can find ways to earn yields on our cryptos that far surpass anything you can find in the traditional market and beat inflation, which currently stands at over 6%.
DeFi is now a fully functional financial system, albeit one that is still young, immature and not fully fleshed out yet. But it has shown tremendous growth over these past four years, with the majority having happened within the past year. —
So yeah, there’s a lot to be grateful for as we look back at how far the crypto markets have come in the past year.
Now, the million-dollar question: Where are we in this bull market cycle?
Well, we’ve seen the market dip quite significantly over the last two weeks … an unexpected move for many analysts and investors alike.
However, the cycles models, fundamental analysis and technical charting analysis all say there is no need to worry just yet. Indeed, Ethereum (ETH, Tech/Adoption Grade “A”) is sitting just below resistance with plenty of momentum behind it.
That has been enough to inspire other altcoins to gather their strength as well, as we’ve seen Solana (SOL, Tech/Adoption Grade “C-”) and Polygon (MATIC, Tech/Adoption Grade “B-”) do over the past few days.
It is important to note, however, that Bitcoin (BTC, Tech/Adoption Grade “A-”) is still lagging behind. And no true bull run can happen with the No. 1 crypto by market cap weighing the rest down. It doesn’t need to lead, but it does need to start pushing higher again.
But, as I said, all signs point toward a much larger market recovery and bigger returns in the coming months. There should still be at least another month or two — maybe even three — left in this bull market. And if things take longer than anticipated to heat up, it may even extend into the second quarter of 2022.
Until the broad market picks back up, this dip can and should be treated as a final buying opportunity.