Cryptocurrency: The year in 12 charts

·5-min read
Bitcoin cryptocurrency coin and the green line of a graph are pictured in Kyiv on 29 July, 2021. (Photo by STR/NurPhoto via Getty Images) (NurPhoto via Getty Images)

Cryptocurrencies have had an outstanding year with two peaks, one in April and a subsequent all-time high in late November that saw bitcoin touch $67,549 (£50,294). Throughout the year the crypto-space has made steady progress with Coinbase (COIN) becoming the first major crypto company to go public with its debut in April, and increased participation from institutional finance.

The first US exchange-traded fund (ETF) linked to bitcoin was also announced in 2021. However, uncertainty surrounds how regulators are going to act towards the sector in 2022. Below are 12 charts that mark the significant points in the trajectory of the cryptocurrency market throughout the year.

After an early December flash crash, some experts warn the market could be heading towards a downturn similar to that experienced in early 2018. Although other experts are more bullish and describe the overall crypto landscape as being markedly different to that in late 2017 and early 2018. Currently, the prices of cryptocurrencies are buoyed by institutional investment and the potential of Web 3.0 is being seriously considered by venture capitalists, global fintech operations and even governments.

Read more: Blockchain: Exploring the building blocks of Web 3.0

The amount of capital pouring into the cryptocurrency market soared throughout 2021. The total market capitalisation of the cryptocurrency sector has now surged to $2.4tn.

The cryptocurrency total market capitalisation has escalated since January 2021.
The cryptocurrency total market capitalisation has escalated since January 2021

Bitcoin (BTC-USD) began the year in a sluggish momentum but reached an early year all-time-high of approximately $64,800 on 14 April. The all-time high was due to events involving Tesla (TSLA) stating it would accept bitcoin as payment and Coinbase listing as a publically traded company on NASDAQ (^IXIC).

Bitcoin reached an all-time high on 14 April 2021.
Bitcoin reached an all-time high on 14 April 2021

The price of bitcoin began to escalate in the lead up to El Salvador's Bitcoin Law going into effect on 7 September.

Read more: Bitcoin: 2021 in 12 charts

The bitcoin price started to soar on the lead up to El Salvador's law coming into effect.
The bitcoin price started to soar on the lead up to El Salvador's law coming into effect

Bitcoin rose throughout October and early November, taking other cryptocurrencies along with it on the bull-run.

The price of bitcoin increased steadily throughout October.
The price of bitcoin increased steadily throughout October

Throughout October most cryptocurrencies increased in value, including bitcoin, ethereum (ETH-USD) and dogecoin (DOGE-USD).

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The ethereum price followed that of bitcoin by gaining throughout October.
The ethereum price followed that of bitcoin by gaining throughout October

Cryptocurrency investors poured money into the market to boost the price of offerings past their former all-time highs in May. Bitcoin reached a new peak of nearly $70,000 in October. The cryptocurrency market correlated with the S&P 500 (^GSPC), Dow (^DJI), Nasdaq, and Stoxx Europe 600 (^STOXX). These markets had impressive runs throughout, with most of these charts hitting all-time highs on 1 November. The below chart is of the S&P 500, which tracks the performance of 500 large companies listed on stock exchanges in the US.

Read more: London Stock Exchange: How 10 most popular companies fared in 2021

The S&P 500 stock market chart for October 2021.
The S&P 500 stock market chart for October 2021

2021 was the year for memecoins With heavy-weights dogecoin and shiba inu making serious gains throughout the year. Shiba inu (SHIB-USD) gained 47,500,000% this year, despite losing more than half its value in December.

Read more: 2021: The year when memes humbled hedge funds

Shiba inu's dramatic rise throughout October and November.
Shiba inu's dramatic rise throughout October and November

Shiba inu gained 777% throughout October. Shiba Inu’s market cap is now over $20bn.

The shiba inu chart for 2021. The price of the memecoin has risen by 2.4 million percent since September 2020.
The shiba inu chart for 2021. The price of the memecoin has risen by 2.4 million percent since September 2020
The shiba inu chart for 2021. The price of the memecoin has risen by 2.4 million percent since September 2020.
The shiba inu chart for 2021. The price of the memecoin has risen by 2.4 million percent since September 2020

Another big gainer this year was polygon. This ethereum-based token improves the speed and cost of transactions on the ethereum blockchain. The cryptocurrency is a layer-2 network, meaning it acts as an add-on layer to the ethereum blockchain. Polygon has risen by 9,372% since January 2021.

The price of polygon (MATIC) has soared throughout 2021.
The price of polygon (MATIC) has soared throughout 2021

Some market analysts see similarities between current cryptocurrency charts and those from early 2018. From early January 2018 to September 2018 cryptocurrencies plummeted 85%. The crash has been dubbed the "Great Crypto-Crash" and is cited as being worse than the dot-com bubble's 78% collapse in 2000.

From early January 2018 to September 2018 cryptocurrencies plummeted 85%, making what has been dubbed the
From early January 2018 to September 2018 cryptocurrencies plummeted 85%, making what has been dubbed the 'Great Crypto-Crash' worse than the Dot-com bubble's 78% collapse in 2000
Some analysts have said the current December downturn shows similarities with the crypto-market crash of January 2018.
Some analysts have said the current December downturn shows similarities with the crypto-market crash of January 2018

However, according to Gunnar Jaerv, COO of First Digital Trust, the 2017 bubble was created by retail investors who eventually lost their exuberance after “wide investment in unsustainable projects lacking real technological infrastructure”. Now the cryptocurrency market is more mature and less volatile, Jaery said. The increased demand and adoption by retail investors is backed by “millions of dollars of investment from major players and institutions who recognise blockchain technology and crypto is here to stay”.

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