Hey Geckos! The Top 30 coins closed out with a total market cap of $2.0T - the market cap hit an ATH at $2.5T in November, before taking a dip at the end of the year. Many narratives formed, giving rise to a bullish surge of altchains, NFTs, and even meme coins; all the while sending Bitcoin’s dominance tumbling to a historical low.
Here are our Top 8 2021 crypto highlights:
1. Solana goes to the moon in 2021 to break into the Top 5
Top 5 Crypto Returns took a quantum leap in 2021 compared to 2020 (+242%), though largely skewed by SOL.
SOL only broke into the Top 5 in Q4 2021, pushing out XRP, DOGE and DOT which were all on the Top 5 crypto list at various points during the year.
XRP (+281%), DOGE (3,545%), DOT (+194%) still generated good returns for investors by the end of the year.
Other than SOL, LUNA, SHIB, MATIC, AXS and FTM in the Top 30 all delivered 5 digit percentage returns or more during 2021.
2. An estimated $14 billion was lost through bugs and exploits in 2021
2021 was an action-packed year with an estimated $14 billion lost through bugs and hacks throughout the year.
The largest hack of 2021 took place in August when Poly Network was exploited for $611 million. This makes it one of the largest crypto hacks to have ever taken place.
Compound’s reward Reservoir bug was the largest of the year, with $147 million worth of COMP drained before the bug was patched.
Polygon discovered a critical vulnerability in their PoS genesis contract on Dec 3 which put 9B MATIC at risk. A silent network upgrade was executed within 24 hours, but not before a hacker made away with ~800k MATIC ($1.6M).
Certain protocols were hacked multiple times in the year. Cream Finance (CREAM) was hacked three times in 2021, losing a total of $185.5 million. THORChain (RUNE) was hacked twice in July, setting it back by $13 million.
3. An eventful year for Bitcoin in 2021, but relatively muted price action
Price action of BTC throughout 2021 was rather muted when compared to 2020. However, Bitcoin still ended the year on a positive note at $47,191, representing a 62.6% increase year-on-year.
Bitcoin hit its all-time high in 2021 as well, reaching $69,045 on 10th November before pulling back.
The year was marked by many noteworthy events for the asset:
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Public listed companies added BTC to their treasuries
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El Salvador adopted BTC as a form of currency
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Crypto clampdown by Chinese authorities, and great mining migration
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Taproot upgrade launched, providing greater privacy and enabling the deployment of smart contracts
4. ETH soars to all-time highs twice in 2021, ending the year +403% at $3,715
In a year filled with altchains and “Ethereum Killers”, ETH still ended the year on a strong note at $3,715 – a whopping 403% year-on-year increase.
ETH hit its all-time high on two occasions in 2021. The first time was on 11 May when it broke the $4,000 mark to close at $4,183. After a pullback, it rallied to a new ATH again on 9 Nov at $4,815.
The year was marked by many notable upgrades to the network in preparation for the arrival of Eth2.0 in 2022:
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London Hard Fork - Ethereum’s much-hyped network upgrade that consisted of five improvement protocols, with EIP-1559 garnering the most attention since it overhauled the entire transaction structure
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Altair - The first upgrade to the Beacon Chain since its launch in Dec 2020
5. Altchains have performed exceptionally with Fantom leading the pack
There is a clear demand for Ethereum / Bitcoin alternatives as users flock to other altchains.
Four tokens have seen price growths that surpassed 10,000% over a 1-year period; namely, Fantom, Terra, Solana, and Polygon. Fantom marked the highest YTD increase at 14,279%
Other altchains have also seen huge positive price returns (<1,000%), though nowhere near the levels of the Top 6.
6. DeFi closed out the year with a bang!
In 2021, the DeFi market cap increased by 7.5x from $20 billion to $150 billion, while its share of the crypto market has more than doubled from 2.8% to an all-time-high of 6.5%.
The resurgence of DeFi in the final quarter of 2021 may be attributed to a new generation of DeFi products nicknamed ‘DeFi 2.0’. These products seek to improve the design of the original DeFi protocols.
On top of that, the rise of incentives for new alternative EVM networks such as Cronos (CRO), Aurora (AURORA) and Boba (BOBA) have driven demand for DeFi tokens on these blockchains.
Although the DeFi market cap has retraced towards the end of the year, it reached an all-time-high of $174 billion in November.
7. NFTs were plastered across the headlines in 2021
Aside from Dorsey's first tweet, iconic legacy internet artifacts such as the World Wide Web source code, Doge, Nyan Cat, Disaster Girl, and Overly Attached Girlfriend were also auctioned off as NFTs.
NFTs entered the mainstream big-time this year. Traditional auction houses Christie’s and Sotheby’s embraced NFTs, holding auctions throughout the year.
Collector DAOs (e.g. PleasrDAO, FlamingoDAO, JennyDAO) emerged, pooling funds to collect culturally significant pieces and democratizing ownership to them.
Big brands from sportswear, fashion, tech and even F&B jumped on the NFT bandwagon -among the names dropping NFT collections include Nike, Adidas, Dolce & Gabbana, Phillips, Budweiser and even Pringles!
NFTs received no shortage of celebrity endorsements in 2021. Big names such as Snoop Dogg, Grimes, Deadmau5, and Post Malone all added momentum to the NFT hype train.
2021 was also the year of several drops of notable collections e.g., Loot, Pudgy Penguins, Cool Cats, Fidenzas, Meebits, and of course BAYC.
8. Total spot trading volume held steady at an average $1.9T monthly volume
Overall, Q4 spot trading volume across the top-10 centralized and decentralized exchanges increased from $4.38 trillion to $6.1 trillion (+38.57%).
Other than an increase in November, monthly trading volume in Q4 essentially remained at the same levels as September.
Monthly trading volume in Q4 has been the highest since the run up and subsequent dip in Q2.
Notably, the DEX:CEX ratio has steadily increased from 6% at the start of the year to 10%.
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