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Footprint Analytics: What's Next for BTC in 2022 after the Big Surge in 2021? | 2021 Blockchain Annual Report

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2021 was a year of transformation for BTC, with El Salvador adopting BTC as legal tender, the U.S. approving the first Bitcoin futures ETF, and BTC hitting a new high of $67,700.

This article is part of the Footprint Analytics Blockchain Annual Report.

2021 was a significant year for the cryptocurrency BTC since its inception, experiencing both highs and brief downturns. According to Footprint Analytics, BTC price surged from $29,000 per coin at the beginning of 2021 to a historical peak of $67,700 per coin on November 8, marking a 133.44% increase. During this period, the overall token price of BTC fluctuated between $45,000 and $60,000.

Q1: Tesla Accepting BTC Payment, Leading BTC into the Public Eye Significantly

On February 8, 2021, Tesla began accepting Bitcoin as a form of payment for its products within a limited scope, while also announcing a purchase of $1.5 billion worth of Bitcoin. This move caused BTC to quickly surge from $38,000 per coin to a new high of $56,000 per coin in 2021. It caught the attention of most investors and institutions, with venture capital from various countries flowing into digital currencies, bringing a positive impact to the cryptocurrency market.

According to Bitcoin Treasuries data, Tesla currently holds 42,902 BTC, ranking second among publicly traded companies in terms of BTC holdings, with a value of $1.84 billion, accounting for 0.204% of the total BTC supply of 21 million coins.

Screenshot Source: Bitcoin Treasuries Public Companies that Own Bitcoin

Q2: China's Policy Declares Comprehensive Ban on Mining, Leading to First Steep Drop in BTC Price

On May 9, 2021, the Chinese government issued a series of policy documents. On May 18, the People's Bank of China and major regulatory agencies issued a joint announcement banning businesses related to virtual currencies, with various banks in China subsequently announcing a ban on using their services for BTC and other virtual currency transactions.

On June 9, the Chinese government implemented a comprehensive ban on mining activities, extending the impact of the policy from the currency circle to the mining circle. This had a significant impact on BTC, causing a sharp drop in price from $59,000 per coin to $34,000 per coin, leading to chaos in the "currency circle," confirming the saying that in the world of cryptocurrencies, a day is like a year.

In addition, on May 13, Tesla withdrew its previous statement of accepting BTC for its products, mainly due to concerns about energy consumption and environmental pollution, fearing adverse effects on the environment.

In conclusion, the frequent issuance of policies and the actions of publicly traded companies regarding BTC will affect the price fluctuations of cryptocurrencies.

Q3: El Salvador Designates BTC as Legal Tender, Marking an Important Milestone in History

On September 7, 2021, El Salvador became the first country to announce BTC as a legal currency. Residents can download the government's digital wallet for free and are exempt from capital gains taxes. Transactions, tax payments, wages, and other commercial activities can be conducted using Bitcoin. It is worth noting that holding 3 BTC can grant permanent residency in the country.

For BTC and the cryptocurrency industry, El Salvador's move is regarded as an important milestone in BTC's history, signifying a qualitative change. According to Footprint Analytics, the BTC price gradually returned to first-quarter levels, averaging between $45,000 and $50,000 per coin.

According to Bitcoin Treasuries data, countries and governments that currently hold BTC include Bulgaria, Finland, and El Salvador, with El Salvador holding 1,391 BTC.

Screenshot Source: Bitcoin Treasuries Countries & Governments that Own Bitcoin

Q4: First Bitcoin Futures ETF Approved in the U.S., BTC Hits Historical High of $67,700

In October 2021, the U.S. approved its first Bitcoin futures ETF, followed by the listing of the Valkyrie Bitcoin ETF. In November, VanEck also launched its own Bitcoin ETF in the U.S.

Furthermore, in the fourth quarter, following the policy stability of El Salvador and the transfer of Bitcoin's hash rate globally after China's policies, with support from major countries like the U.S., Russia, Canada, and others, BTC's price reached a historical high.

Currently, the Grayscale Bitcoin Trust holds 648,069 BTC, accounting for 3.086% of the total supply of 21 million BTC. Other physical companies hold less than 50,000 BTC each.

Screenshot Source: Bitcoin Treasuries ETFs that Own Bitcoin

Conclusion

Over the past decade, BTC has seen trading between retail investors and believers. In 2021, the entry of giant companies like Tesla and the designation of BTC as legal tender by El Salvador have rapidly propelled the development of the crypto market, becoming significant factors affecting the prices of BTC and other cryptocurrencies.

The price of BTC has experienced multiple ups and downs. Eventually, the price stabilized above $40,000 at the end of 2021. The policies of a country or public opinion can no longer have a lasting impact on the price trend of Bitcoin. Market recognition and consensus on value have been the main theme of Bitcoin's qualitative change in 2021.

As we enter 2022, whether BTC can gain more public legitimacy will likely be the main reason for its continued dominance.

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About Footprint Analytics

Footprint Analytics is an all-in-one visual blockchain data analysis platform. Footprint helps solve the problem of cleaning and integrating on-chain data, allowing users to enjoy a zero-threshold blockchain data analysis experience for free. With over a thousand chart templates and a drag-and-drop charting experience, anyone can create their personalized data charts in 10 seconds, easily gaining insights into on-chain data and understanding the stories behind the data.

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