If 2020 was the year of the bull, 2021 was the year that crypto went mainstream. In the past twelve months, we’ve witnessed leaps in adoption, infrastructure, regulation, and policy — not to mention new all-time highs.

As we head into 2022, the Kraken Intelligence team revisited some of the past year’s most notable market events and provided an outlook of what may be expected in the year ahead.

The ₿ull charges on

For the third year in a row, the crypto markets closed higher (+187%) in what remains a macro bull market trend. Though not as impressive as 2020’s return of +310%, it’s well ahead of 2019’s +58% return.

BTC and most other crypto-assets finished the year higher and outperformed traditional financial assets like the S&P 500, the NASDAQ, gold, government bonds and high-yield bonds. Despite the latest market pullback to sub-$50k, historical volatility, technical patterns, and on-chain activity collectively suggest that the macro BTC bull run isn’t over and could trend higher in 2022

Crypto enters the zeitgeist

Developments in 2021 either accelerated the adoption and success of crypto-assets, or served as a headwind that gave market participants a reason for pause. In spite of the ups and downs and the retracement from all-time highs, crypto came out on top; the industry’s innovation and investment have never looked better. 

The most notable events of 2021 include El Salvador’s adoption of BTC as legal tender, Elon Musk’s vocal opposition to the leading crypto-asset (after initially announcing Tesla’s support for BTC payments), China officially banning Bitcoin, and the approval of the first BTC ETF in the U.S (albeit an ETF tied to the futures market rather than the underlying spot market).

Infrastructure, NFTs and DeFi

Evidence of the surge in crypto adoption is evident in the balances held by BTC and ETH addresses, CBDC developments, trading volume, corporations adding crypto to their balance sheets, and open support and recognition by well-respected players in traditional finance.

Demand for DeFi and NFTs have fuelled innovation in a range of Layer 1 and Layer 2 platforms, leading to spectacular growth in 2021. The demand saw these protocols chart new territory on social media, drawing a new generation of users into the crypto space. Further, the underlying crypto-assets powering these Layer 1 platforms (e.g., ETH, SOL, ADA, DOT) vastly outperformed the broader crypto market as participants found great value in their utility.

Want to learn more about what went down and what’s ahead? Download Going Mainstream for the low-down on 2021 and a snapshot of the road ahead: