One of the reasons that cryptocurrency makes so many headlines is due to its inherent volatility. Within a single month, or even week, it’s not surprising to hear that one of the major cryptocurrencies, such as Bitcoin, has both made a new high and dropped in value by 10% or more.
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In 2021, there were plenty of boom and bust periods for the major cryptocurrencies, often as a result of third-party news. Elon Musk, the richest man in the world and the CEO of Tesla, is often behind major movements in cryptocurrency prices with his tweets and comments. Here’s a brief overview of some of the highlights in the crypto world in 2021, along with the then-current price of Bitcoin, the largest and most well-known cryptocurrency, where applicable.
- Bitcoin price: $37,000
The year in crypto got off to a rousing start in January when Elon Musk attached the “#Bitcoin” moniker to his Twitter bio. This seemingly innocuous notation was enough to spike the price of Bitcoin by a whopping 20%, moving more than 15% up in a single hour. Musk accompanied the hashtag with another of his signature cryptic tweets, “In retrospect, it was inevitable,” adding further speculation as to what Musk’s plans were.
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February: Tesla Buys $1.5 Billion in Bitcoin
- Bitcoin price: $44,000
Elon Musk’s mysterious tweets and innuendo regarding Bitcoin came to fruition in February when his company Tesla announced that it was buying $1.5 billion in Bitcoin. The company also announced that it would begin accepting Bitcoin as payment for its products sometime later in the year. Unlike some of Musk’s more cryptic comments, crypto supporters viewed these moves and concrete backing for the future of Bitcoin.
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March: Bitcoin Hits $64,000
From September 2020 to March 2021, Bitcoin ran nearly straight up, from about $10,000 to just over $60,000 for the first time. That marked a gain of nearly 1,000% over the prior year, giving the cryptocurrency a valuation of over $1 trillion. Market pundits pointed to stimulus-fueled speculation and institutional buying as part of the reason for the crypto’s surge.
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April: Coinbase Goes Public
Cryptocurrencies got a significant boost in April when crypto exchange Coinbase Global went public at a valuation of nearly $100 billion. No less a publication than the New York Times dubbed the event a “Coming-Out Party” for cryptocurrency, as Coinbase promised to operate profitably and make crypto transactions easier, a sign of growing acceptance of the industry as a whole.
April: Dogecoin Gains Notable Support
Dogecoin is a cryptocurrency that began as a joke, but it gained real financial momentum in April when heavy hitters Elon Musk and Mark Cuban both tweeted support for the coin. In 24 hours, the price of the formerly obscure crypto jumped 20%. While Musk whimsically dubbed himself “The Dogefather” before his appearance on “Saturday Night Live,” Cuban actually called Doge “…the one coin that people actually use for transactions.”
May: Bitcoin Plunges 30% in a Day, 40% in a Week
- Bitcoin price: $30,000
In a wild ride, Bitcoin fell as low as $30,000 before recovering immediately to $38,000. Once again, Elon Musk played a role in the crypto’s volatility, tweeting on May 12 that Tesla would no longer accept Bitcoin due to environmental concerns. Later, Musk tweeted that Tesla hadn’t sold any of its Bitcoin, contributing to the bounceback in the crypto’s price.
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June: China Renews Crackdown on Crypto
- Bitcoin price: $29,000
China’s renewed efforts to crack down on crypto, including shutting down all crypto miners in the country’s Sichuan province, led to a 16% drop in the price of Bitcoin, including an 8% drop in just 24 hours. China’s central bank also urged financial institutions to cease their crypto-related services.
June: El Salvador Accepts Bitcoin as Currency
- Bitcoin price: $34,000
In something of a dream come true for crypto enthusiasts, El Salvador became the first country in the world to accept Bitcoin as legal tender. As one of the main cases against cryptocurrency in general is that it is not widely accepted by formal institutions, this marked a significant move toward global legitimacy. Traders pushed up the price of Bitcoin by about 5% on the news, hoping El Salvador would just be the first in a long line of countries that would formally accept Bitcoin as a legitimate currency.
September: Bitcoin Sells Off Below $41,000
The sharp selloff in Bitcoin of over 10% in September was due to a number of factors, including traders adopting a so-called “risk-off” mentality due to global equity declines in the seasonally weak month of September. However, China also reiterated and strengthened its stance against cryptocurrency, driving the price of Bitcoin down as much as 8.9% in a single day, down below $41,000. However, that set the cryptocurrency up for its record run to an all-time high of $68,950 in November 2021.
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November: Bitcoin Loses 20% in a 8 Days
- Bitcoin price: $56,000
In mid-November 2021, Bitcoin lost 20% of its value in eight days, its worst weekly performance in six months, according to Reuters. Part of the selloff could be attributed to profit-taking, but the liquidation of cryptocurrency exchange Mt Gox way back in 2014 also played a role in traders’ minds. A court in Tokyo approved plans to pay off the creditors of the collapsed Mt. Gox with bitcoin, meaning in early 2022 a flood of distributed Bitcoin may be sold by creditors looking to recoup some of their losses in cash. This fear of widespread selling helped knock down the price of Bitcoin back below $56,000.
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