2021 drove the crypto market through periods of high volatility resulting in the addition of $1.5 trillion in the overall market value. As per data, the introduction and the rise of various crypto-driven products like the non-fungible token and meme coins like Dogecoin contributed greatly to rerouting investors to the cryptocurrency market.
To put things in perspective, Bitcoin has witnessed a strong growth of over 60% this year, while altcoins and meme coins also grabbed the spotlight. Ethereum emerged as the undisputed leader of altcoins by registering over 400% growth year-to-date. At the same time, DOGE’s popularity helped its price boost 2,674%.
The popularity of memecoins like DOGE and Shiba Inu also challenged the dominance of Bitcoin.
The bitcoin dominance has fallen by 42% year-to-date and the Head of Asia Pacific with cryptocurrency exchange Luno, Vijay Ayyar believed the dominance will shrink further “given the explosion of assets in the crypto space and the various use cases.” Adding to this another trend that can be carried on to next year would be the interest shown by the venture capitalist funds.
As per data compiled by PitchBook Data, venture capital funds have poured about $30 billion into crypto, which was more than four times the previous high of $8 billion noted in 2018. Spencer Bogart, general partner at San Francisco-based Blockchain capital spoke of the investors’ sentiment as he stated,
“We’ve moved beyond just digital gold. We’ve got financial services, art, gaming as a subcategory of NFTs [non-fungible tokens], Web 3.0, decentralized social media, play-to-earn – all of that made investors think ‘We don’t have enough exposure'”.
With the technology growing leaps and bounds, the investors were continuing “funding anything and everything” noted analyst Rob Le. NFTs have remained a topic of intrigue whereas crypto businesses like the derivatives exchange FTX was reporting an $18bn valuation. The growing scale of the industry could nudge the attention of more VCs resulting in a further increase in crypto market value.