2021 in review pt 1 of 5: The Broad Picture

What an eventful and intense year we’re wrapping up in this report. In 2021, BTC was adopted as legal tender in El Salvador, and several public companies added bitcoin to their balance sheets.
Source: Tradingview

What an eventful and intense year we’re wrapping up in this report. In 2021, bitcoin was adopted as legal tender in El Salvador, and several public companies added bitcoin to their balance sheets. On the institutional side, open interest boomed on CME, and several bitcoin ETFs saw the light of day. Additionally, we saw numerous Tier 1 investment banks begin offering bitcoin and crypto-related services such as custody and trading. However, the year was not all filled with bullish news. Once again, China delivered bad news as they enforced a strict mining ban, leading the hashrate to temporarily plummet in bitcoin before returning to its pre-China ban levels six months later. 2021 saw bitcoin pushing towards new highs, reaching a new all-time high in November of $69,000.

Bitcoin’s performance has been dwarfed by the incredible altcoin growth this year. 2021 has felt like a continuous altseason, only taking a breather during the summer months. This altseason has seen several short-lasting bull runs in various parts of the markets as traders have rotated through the narratives. The DeFi sector, the metaverse sector, and memecoins all saw periods of strong growth. However, most stickiness in strength has been found in ETH and other layer-1s, in addition to NFTs.


As bitcoin has found its way into traditional investor portfolios, macro news has slowly but surely, begun impacting its performance. Inflation has been running high throughout the year, and overall, bitcoin has proven to be a good inflation hedge. Nevertheless, bitcoin has also proven to be sensitive to hawkish FED statements and fear in the broad financial markets. In that regard, bitcoin has behaved like a risk-on asset. However, while bitcoin shows risk-on traits in the short run, there is no doubt that central bankers and politicians worldwide will have a very hard time dampening the increasing inflation without causing harm to the economy.

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