In 2021, the cryptoverse was anchored by numerous high-profile investments and milestones, driving it into a multi-trillion-dollar industry.

As the pioneer cryptocurrency, the industry’s growth was centered around . Now, with 2021 winding down, let’s take at what on-chain data says about Bitcoin’s year.

Bitcoin gains in 2021

Bitcoin reached 2021 at the top of the list for major milestones. Bitcoin started the year at $29.4k. In January it reached $40k. Then, in the next month, Bitcoin dropped below $30k.

Bitcoin reached a high of $50k and 60k respectively in February. Bitcoin fell below $30K in July after reaching a record high of $63.5k at the beginning of April.

Bitcoin January – June Price Chart: Tradingview

Over the following three months, a consistent uptrend saw Bitcoin reach a new ATH of $68.8k in November 10. But, these gains were lost once again during the next three months, when Bitcoin dropped below $45k.

July – November Price Chart

Although Bitcoin’s volatility continued to be a concern, Bitcoin finished the year with gains exceeding 70%. Bitcoin’s 2021 gains of 300% are significantly less than the Bitcoin gains of 70% in 2018. There are however some positive points to Bitcoin for 2022.

To The Flipside

• Although Bitcoin was a great performer in 2021 and is now down more than 30% from the November 10 peak,

• This has resulted in 3.48 Million Bitcoins, or 18.34% of the current circulating supply being at risk.

More investors are turning to HODLing

Unlike the previous trends where investors would short Bitcoin – buy at lower prices and sell higher – in 2021, the number of long-term holders has increased significantly.

From week 1 through 52, on-chain data showed that holders who are long-term added 1.846 Million BTC to the value of their holdings. At week 52, their holding totals at 13.33 million BTC – a 16% increase year-to-date.

However, the short-term supply of holders has fallen by 1.428million BTC since 2021. This category now holds a total of 3.01 million BTC – representing a 32% year-to-date.

Current Bitcoin reserves are at 13.34 millions BTC.

The amount of futures held by long-term investors increased as well. Year-to-date, the Open Futures Interest increased by 97% – it now stands at $9.57 billion. However, Bitcoin’s futures trading volume fell by 16% and now stands at $36.7 Billion/day.

2021 Decisive Moments For Bitcoin

Innovations in the cryptocurrency and its adoption were key factors to Bitcoin’s outstanding 2021 performance. Some of the key moments for the world’s largest cryptocurrency in 2021 are;

• Launch of the Bitcoin ETF:After years of waiting, October saw the ProShares Bitcoin ETF get its green light. This sparked an unprecedented rally which drove Bitcoin’s price above $68k.
• Bitcoin is now a Tender: El Salvador has officially recognized Bitcoin as legal tender on September 7. This creates the impression that Bitcoin could be used as an exchange currency.
• In 2021, 20,000 Bitcoin ATMs will be installed: As Bitcoin gains mainstream acceptance, the growth in global Bitcoin ATM installation was rapid.
• Bitcoin’s first update in 4 years: Taproot made it worth the wait. This upgrade enabled Bitcoin to make more complicated transactions and opened up the network for smart contracts.
• China’s Crackdown on Bitcoin and Mining: It led to major declines in Bitcoin’s hash rate and a downtrend. As it rebounded from both downtrends, Bitcoin proved its resilience.
• Institutional Investors Adopt Massively: More institutional investors will turn to Bitcoin in 2021 as they recognize the asset is a great hedge against inflation.

2021 Decisive Moments For Bitcoin

Following China’s ban on mining, approximately 53% of miners were shut off almost overnight. In July, the hash rate of Bitcoin dropped below 68 Ehash/s – its lowest point since September 2019.

However, the miners sought out other locations – the great mining migration. Mining hash rates quickly rebounded, with ATHs of 182 EH/s. The 2021 finish is 27% higher than January. Additionally, aggregate miner revenue increased by 58% in the year to-date.

Why you should care

Although Bitcoin is ending 2021 on a low, the world’s largest crypto reached some significant milestones in the year that could act as a pedestal for greater achievements.

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