What a year it was! One could almost say that a Bitcoin year corresponds to seven human years, that’s how rapidly the development is progressing: Alltime High chases Alltime High – only to keep looking for soil at the peak of the euphoria. Even a mini bear market kept the community in suspense in 2021. And what actually happened to the stock-to-flow model? Time to look back.
We have created individual articles for each quarter. You can find them here, here, here and here.
Quarter 1
That started well. In the first quarter of this year, the No. 1 cryptocurrency made a brisk debut. While Bitcoin was still quoted at 29,000 US dollars (USD) on January 1 of this year, on March 31, it was still USD 58,600 – a price growth of 100 percent within three months. That’s a lot even for high-flyers Bitcoin. Too much, as it turned out in retrospect. But one after the other.
Bitcoin energy consumption: an annoying constant topic
There was a furore – once again it has to be said – the buzz about Bitcoin’s energy consumption. That was the headline FAZ about that “Bitcoin harmful”There was even talk of a dirty currency Bitcoin. Mark Schieritz, an author by trade The time even called for the Bitcoin ban. But slowly. The subject of energy consumption in proof-of-work cryptocurrencies is a complex one. It cannot be dealt with in short articles. That is why a team from BTC-ECHO took care of the issue of electricity consumption. You can read the result in issue # 49 of the crypto compass.
Dispute over Bitcoin whitepaper
There was also a dispute this year about the Bitcoin whitepaper. Because an Australian is still trying to convince the world that he is Satoshi Nakamoto. We are of course talking about Craig Wright. Wright not only claims ownership (and even wants to enforce in court) the code, but also the white paper. He took the latter as an opportunity to warn well-known hosters of the original Satoshi paper and to have the white paper deleted.
The result, however, was the diametrical opposite: Instead of deleting the paper, more and more services have agreed to host the Bitcoin whitepaper on their own website.
Bitcoin bigger than Tesla for the first time
For the first time in February of this year, Bitcoin overtook US automaker Tesla in terms of market capitalization. Because already in February the crypto currency No. 1 was quoted at 58,330 US dollars. This means that the entire Bitcoin market was worth around USD 955 billion – more than Tesla, which “only” has a market value of USD 712 billion at the same time.
At the moment the situation is reversed again. Bitcoin ranks 10th ($ 908 billion market capitalization) and Tesla ranks 8th ($ 997 billion market capitalization).
First Bitcoin ETF launched in North America
And then there was a bigger premiere to celebrate in the first quarter of this year: With the Purpose Bitcoin ETF, the first Bitcoin ETF is celebrating its genesis on North American soil. Contrary to what had been hoped, the index fund is not traded in the USA, but in neighboring Canada.
Until recently, the US Securities and Exchange Commission had bricked up – and had finally collapsed. More on that later.
Quarter 2
Typical for this year: discussions about flippening. What is meant is the displacement of Bitcoin as the most valuable asset in the cryptoversum by Ethereum. This trend already began in April of this year, as we report here. Incidentally, the trend continues these days. Towards the end of the year it is clear: Ether performed significantly better than Bitcoin in 2021: BTC gained around 62 percent, and at ETH it is a whopping 440 percent.
The Tesla cause
But the courses weren’t all that drove the Bitcoin community this year. Also the ups and downs of the Tesla-Integration of Bitcoin moved hearts. In February of this year, the US automaker Tesla prepared a party for Bitcoiners by announcing a large-scale Bitcoin strategy. In addition to the purchase of BTC worth 1.5 billion US dollars, the acceptance of BTC for electric cars is also promised. No sooner said than done: On March 24th, Tesla activated the purchase of a car via Bitcoin.
But the euphoria shouldn’t last long. On April 27, the automobile manufacturer sold 10 percent of its BTC inventory – presumably to improve the balance sheet.
Coinbase goes public
With the US crypto exchange Coinbase became the first Bitcoin trading platform to become a publicly traded company on April 14th of this year. The company, which was brought to the trading floor by means of Direct Public Offering (DPO), made its debut with a whopping 68 billion US dollars. The average price per share was estimated at $ 343.58 per share. Anyone who has held so far is more likely to be smeared. Because compared to the initial price, COIN is around 23 percent in the red.
At the time of writing, one share of COIN is available for $ 252.
El Salvador is making Bitcoin legal tender
Nobody would have expected that at the beginning of the year: On June 9 of this year, the parliament of the Central American state of El Salvador voted for a law that would make Bitcoin the official national currency alongside the US dollar. The law is historical. In no other country in the world is there a requirement to accept payments with BTC.
The law was finally introduced on September 7th. A good two months later, BTC-ECHO was on site with a team and got its own picture of the implementation. You can read the result in issue 54 of the Kryptokompass or listen to it in our podcast.
Quarter 3
That was a bang: after China had killed the local mining industry from one day to the next in June of this year, a so-called crypto transaction ban followed on September 24th.
That means: All private crypto transactions have been banned since the end of September. To make matters worse, there is a ban on foreign exchanges to do business in China. The ban was not issued by the Chinese government, but by the country’s central bank PBOC.
“The provision of services by overseas virtual currency exchanges to residents of China over the Internet is also an illegal financial activity,”
it says in the PBOS statement.
But the ban was apparently a smoke candle to distract from existing problems in the country. Rumors of a possible insolvency of the real estate company Evergrande had massively unsettled both the country and the global financial markets. A scapegoat was quickly found: disrupt cryptocurrencies “the economic and financial order“, Writes the Chinese central bank.
Only the mining ban in China should have an even more impressive effect. Because since June of this year, proof-of-work-supported mining for crypto currencies is no longer allowed. The short-term drop in the hashrate in the network was so enormous that many market observers were afraid of possible attacks on the network.
However, as can be seen in the graph, the decline was only temporary. Sven Wagenknecht explains in his comment why the Chinese mining ban can even be positive for Bitcoin’s decentralization in the long term.
Mining is shifting from east to west
A look at the current hashrate shows that the Chinese mining ban in the summer of this year did not result in a lasting collapse in network security – because it is at an all-time high of 197 EH / S. One region in particular benefited from this: North America. Both Canadian and American mining companies had massively upgraded this year. Some companies even made their debut on the stock exchange.
The Canadian company HIVE Blockchain Ltd. for example, had acquired mining rigs for $ 66 million in July of this year and increased its hashrate by 46 percent.
British PayPal integrates Bitcoin
2020 lifted PayPal with its integration in the USA of Bitcoin and Co. from the Covid crash, which cost BTC 35 percent of its value within one day. With the United Kingdom, a second English-speaking country has been on board since July this year. It is still unclear when integration will also follow in this country.
Salvadorans: inside take to the streets against Bitcoin law
El Salvador’s President Nayib Bukele may be popular, but not everything he touches turns to gold. The Bitcoin law, for example, had to get off to a somewhat bumpy start: Fraud for the promised 30 US dollars in Bitcoin, which every Chivo newbie is entitled to, was the order of the day. This and the high volatility of the crypto currency caused many Salvadorans to take to the streets against the law in August. A Chivo ATM was also set on fire.
Quarter 4
Quarter number 4 was a mixed one for the Bitcoin bulls. The crypto currency No. 1 reached its preliminary all-time high on November 10th at USD 69,000. At the time of writing (December 28), however, the digital gold is far behind. Bitcoin weighs just $ 49,000 today, around 29 percent less than six weeks earlier.
But even the last quarter of this year had a lot of explosive in store. The fourth quarter at a glance.
Justice auction: North Rhine-Westphalia to auction confiscated Bitcoin
It was previously only known from the USA: Bitcoins confiscated in criminal proceedings were auctioned for the first time in Germany this year. More precisely, the North Rhine-Westphalian law enforcement authorities auctioned Bitcoins worth an eight-figure sum. Contrary to all intuition, the coins, which were offered in different denominations, went under the hammer above the market price at the time.
This bitcoin (auction number # 147503) For example, the highest bidder was worth 57,010 euros – even though the market price at the time was only 50,800 USD.
USA now largest Bitcoin mining nation in the world
The mining exodus from east to west is complete. As from data of the Cambridge Center for Alternative Finance shows, the US contributes the largest part of the global Bitcoin hashrate with 35 percent. The Chinese share, on the other hand, is currently zero, according to official figures.
The US is thus filling the power vacuum created by China in terms of Bitcoin within a few months.
MicroStrategy is becoming a bitcoin whale
The US stock exchange company MicroStrategy has placed great value on its Bitcoin holdings not just since yesterday. The company, whose business model is actually the sale of business intelligence software, was able to build up veritable Bitcoin reserves in a short time.
The company run by Michael Saylor last arrived at the beginning of December and bought 1,434 BTC. MicroStrategy thus holds a total of 122,478 BTC.
Mastercard wants to integrate Bitcoin
The plastic card manufacturer Mastercard is jumping on the crypto train. As it became known on October 26th, the payment service provider wants to enable payments in Bitcoin and Co. and install a crypto-based reward system.
However, it is not yet known when the time will come. You can find more information in our podcast edition on the subject.
But also Sparkasse
But that’s not all of the crypto integration. Also the German Savings Banks and Giro Association plans to do the same. A crypto wallet is already in the making, and the first pilot projects could start as early as next year. That would be a bang. After all, the savings banks are still the credit institutions with the most customers in the country. In this way, several million customers could be integrated into the crypto ecosystem in one fell swoop.
By the way: If you are disappointed with the almost certainly believed 100,000 USD per Bitcoin, you should take a look at the Yearly candles throw.
Because even in 2021, the crypto currency No. 1 can post a price gain of 65 percent. And so we look to the year 2022 with optimism.