The year of the Doge? 2021 was cryptocurrency's wildest year yet

Bitcoin close to $70,000, “memecoins” worth billions of dollars, a blockbuster Wall Street listing and a sweeping Chinese crackdown: 2021 was the wildest yet for cryptocurrencies, even by the sector’s volatile standards.

Here is a look at some of the major trends that dominated cryptocurrencies this year.

Bitcoin: Still no.1

The original cryptocurrency held its crown as the biggest and most well-known token —though not without a host of challengers biting at its heels.

Bitcoin soared over 120 per cent from January 1 to a then-record of almost $65,000 in mid-April. Fuelling it was a tsunami of cash from institutional investors, growing acceptance by major corporations such as Tesla and Mastercard and an increasing embrace by Wall Street banks.

Spurring investor interest was Bitcoin’s purported inflation-proof qualities — it has a capped supply — as record-breaking stimulus packages fuelled rising prices. 

Yet the token stayed volatile. It slumped 35 per cent in May before soaring to a new all-time high of $69,000 in November.

The rise of the memecoins

Even as bitcoin remained the go-to for investors dipping their toes into crypto, a panoply of new — some would say joke —  tokens entered the sector.

“Memecoins” — a loose collection of coins ranging from dogecoin and shiba inu to squid game that have their roots in web culture — often have little practical use.

Dogecoin, launched in 2013 as a bitcoin spinoff, soared over 12,000 per cent to an all-time high in May before slumping almost 80 per cent by mid-December. 

The memecoin phenomenon was linked to the “Wall Street Bets” movement, where retail traders coordinated online to pile into stocks such as GameStop Corp, squeezing hedge funds’ short positions.

Regulation: The elephant in the room

As money poured into crypto, regulators fretted over what they saw as its potential to enable money laundering and threaten global financial stability.

Long sceptical of crypto watchdogs called for more powers over the sector, with some warning consumers over volatility. When Beijing placed curbs on crypto in May, bitcoin tanked almost 50 per cent, dragging the wider market down with it.

NFTs

Non-fungible tokens (NFTs) — strings of code stored on the blockchain digital ledger that represent unique ownership of artworks, videos or even tweets — exploded in 2021.

In March, a digital artwork by US artist Beeple sold for nearly $70 million at Christie’s, among the three most expensive pieces by a living artist sold at auction. The sale heralded a stampede for NFTs.