Investing in cryptocurrencies: the results of 2021

The outgoing year 2021 showed an incredible surge of interest in the cryptocurrency market from investors. While in 2018 $8 billion was invested in this industry, now we can talk about $30 billion, which is almost 4 times more than the previous record.

Bitcoin’s biggest holders

BTC continues to hold onto its status as a major cryptocurrency. Anti-coin figures are soaring and creating a massive market sprawl, but it is not yet possible to move the giant from its leadership position. Investors continue to invest in the most established cryptocurrency and build up capital with confidence.

Microstrategy invested the most in bitcoin in 2021. The software developer managed to accumulate 122,500 BTC worth over $5.6 billion. The silver medal and second place in the ranking of major cryptocurrency holders goes to the Tesla brand. The famous electric car manufacturer has almost 3 times less accumulation than the leader: 43,200 BTC. The total value of this part of the portfolio is approaching $2 billion. Bronze goes to Square, the payments company run by Jack Dorsey. A relatively modest 8,000 BTC can be converted into $368 million.

Anti-coin development

As the crypto market grows and changes, bitcoin has to squeeze. Decentralised finance (DeFi), non-decentralised tokens (NFT), decentralised games (GameFi) and other cryptocurrency industries are steadily entering a niche that used to belong entirely to the monopoly BTC.

The top 10 cryptocurrencies in terms of capitalisation have changed dramatically over the year. Bitcoin Cash and Chainlink are gone, and Litecoin is also among the outsiders. USD Coin, Avalanche and Solana took the empty spots.

Terra, Solana and the very volatile Dogecoin were in the top three in terms of profitability. The latter was of no interest to traders at all until February 2021, when a few tweets from Ilon Musk mentioning it led to a price hike of several times. The second half of spring saw a new surge in the exchange rate, which took Dogecoin to the 4th position in terms of capitalisation. A couple of months passed and DOGE fell out of the top 10, even a wave of hype did not help it to stay there. The meme coin has pushed other startups into the market, including on the “dog” theme. Shiba Inu was the loudest among them.

The Solana token was worth $1.52 in the first month of 2021, and ends the year at $190. At its peak, the value soared to $259. Sam Beckman-Fried, who holds the position of FTX CEO, expressed confidence in the prospects of the token’s growth when its value was minimal. This view caused much disbelief among traders, the extent of the fidelity of the prediction impressed many.

The Terra token broke into the top 10 in terms of capitalisation when its value soared to $90.93 (starting at $0.65). At its peak, the rate was as high as $103. The biggest gains have been seen since late summer, with the first near-vertical surge coming in the spring months. The trend of frequent historical highs has been going on for several months now. It is highly likely that the number of records will increase significantly in the near future.

About the underdogs

Investors were mostly disappointed by Internet Computer (down 96%) and Monero (66% from its all-time high three years ago). The EOS token, a potential killer of Etherium, also failed to meet expectations. With the exception of a sharp rise and fall in May, the line on the currency’s exchange rate chart has been horizontal. And the average value of EOS is 86% lower than the peak reached in mid-Spring 2018.

Statistics prove that investing in cryptocurrencies can be profitable when tracking trends and swings. This market is volatile and highly volatile, which makes investments and decisions based only on the dynamics of past cycles useless. Studying current trends will allow you to act more logically, minimise losses and generate high returns.