Crypto’s Wild 2021 Will Go Down as One for the Ages

Cryptocurrencies had a blockbuster year in 2021 by almost any measure. Bitcoin, Ether and other coins jumped, reaching new highs far beyond their previous peaks. More institutions began offering research and services for the sector, and big-name investors piled in. Along the way, nonfungible tokens (NFTs) and decentralized finance (DeFi) joined the popular lexicon.

There have been big wins and big scams, important upgrades, major crackdowns — and some major themes that will carry into 2022. Central banks are getting serious about their own digital currencies, and regulators are becoming very interested in what had previously been a “Wild West” of an industry.

To help get a sense of the path ahead, here’s a look at some of this year’s top moments in crypto, why they mattered and what they may portend:

Tesla Puts Bitcoin on Its Balance Sheet

What happened: Elon Musk’s electric-car maker announced to the world on Feb. 8 that it had invested $1.5 billion in Bitcoin and signaled its intent to take payments in the cryptocurrency as well. That boosted Bitcoin’s price to a record, while setting off all sorts of discussion about whether other companies might follow suit.

What’s next: Tesla Inc.’s bold move ended up being an outlier, although one company — MicroStrategy Inc., led by Bitcoin backer Michael Saylor — famously took investing in the cryptocurrency to a whole new level, even issuing debt to buy more. MicroStrategy’s holdings now sit in the billions of dollars. Both Tesla and MicroStrategy have had to take impairment charges on their positions because of price swings and Bitcoin remains a volatile asset. Still, as the world’s largest cryptocurrency moves into the mainstream, expect more corporate treasurers to consider it an investment option, and more companies to weigh accepting it as payment.