The world’s first cryptocurrency had a breakthrough year in 2021, hinting at the trends and next level developments of the coming 12 months.
Time always has a way of putting things in perspective. When I first got involved in the bitcoin and blockchain industry more than 5 years ago, it was a fringe subject that few people understood much about, and even fewer saw it as a solution to any of the daily challenges in their lives. For me, it was exactly that kind of solution – a way that I, as a single struggling to make my clean technology company succeed, could invest in my children’s future.
I was worried about inflation and the stability of our financial system and saw opportunities for growth in bitcoin that I couldn’t imagine elsewhere in our economy. At the time, I got a lot of criticism for making such a clearly reckless move – and even got called a bad mother – and at the time, I can understand why it seemed like such a shocking and risky thing to do.
But times have changed, and even just this last year has seen un unprecedented rise in adoption for the world’s first cryptocurrency. Holding bitcoin is no longer a radical investment decision when leading stock exchanges like the NYSE and TSX have multiple btc-based funds, and the biggest global financial players have moved aggressively into the market.
In April of 2021, bitcoin became the fastest ever asset class to reach a market cap of US $1 trillion, and despite bans by repressive governments like that of China and Turkey, more people than ever are using Bitcoin in their daily lives. The rise in adoption in the last year is incredible, with more than 55% of all btc holders being brand-new to cryptocurrency in 2021
Bitcoin is not a currency for a government. It is a global currency for the people.
– Wences Casares, entrepreneur and Board Director of Paypal
For people who are new to the market, it might seem like this phenomenal growth came out of no where. The reality is that it’s the product of years of work on the part of the blockchain community – investor education, government advocacy, and business and technology development by those who had faith, even in dark times, that this was something meaningful and important to our future.
This work culminated in 2021’s rise to the mainstream, accelerated by 5 key factors that made Bitcoin the right solution for our moment in time.
- It’s a system that truly works for people: in 2021, the public began to see real and concrete examples of bitcoin’s power to build a more accessible and egalitarian world. The landmark adoption of btc as a currency by El Salvador, and its amazing adoption rates across Africa for remittances and payments, shows just how effective it is when government currencies can’t be relied on. As a hedge against devaluation and inexpensive way to transfer money, it’s no wonder that the fastest-growing markets for bitcoin usage are in developing countries.
- BTC is trusted and secure: despite the catastrophic challenges to supply chains and services over the last few years, the bitcoin blockchain has been going strong. This is an industry built by creative and solution-oriented people, and even with China’s crackdown shutting down a large number of the world’s mining operations, the network bounced back quickly and kept transaction times and costs low. This has proven to be a reliant system that can withstand whatever disruptions the future may hold – unlike many parts of our economy.
- No longer scared of regulation: in 2021, the world’s second largest economy banned all cryptocurrencies, and with an unclear regulatory path in the biggest economy, it would be logical to assume that btc investors would be getting scared. Instead, banks, major companies and investment firms jumped into the market, and individuals added more than 25 million new Bitcoin wallets. Whatever regulators decide, bitcoin’s market will find a way to thrive.
- Market dominance: the digital economy reached a peak of more than US $3 trillion in 2021 – which if it was a country, would make it the 5th largest economy in the world, ahead of India – and as the largest crypto, bitcoin is at the center of the growing universe of digital assets and services. It’s the top medium of exchange between other crypto and mainstream payments providers like Mastercard, Paypal and Square, and in the face of a lot of competition, is holding its place as the “native currency of the internet”.
- Demonstration of value: in the US, inflation is at a 40-year high and in Canada, at an 18-year high – and these numbers are shockingly unreflective of just how much value our money has lost, considering housing and food prices are going parabolic. On the other hand, bitcoin is up more than 100% on the year, even after a series of price corrections. It’s been 13 years since the genesis block of bitcoins were mined, and its proven its value, utility and future potential over and over again, for some of the biggest challenges our economy faces.
– Robert Kiyosaki, entrepreneur and author
As always, the Canadian Blockchain Consortium is a strong supporter of the growth of our national blockchain and cryptocurrency industries, because these technologies are playing an increasing role in the evolution of the global economy. Canada needs to innovate to stay competitive and with bitcoin, we have an opportunity to leverage our natural advantages into another pillar of our growing tech economy – at a time when its importance can’t be understated.
If the past two years are any indication, our world will continue to become more volatile, more unequal and people across the world will keep pushing for systems that truly work for them. Combined with the massive wave of mainstream investment that has been propelling bitcoin into the traditional financial system, I believe that 2022 is going to be another year of strong growth and adoption, and we’re going to truly see how much this incredible technology can change the world for the better.