2021 has been described as a breakthrough year for cryptocurrencies. Increased regulation of crypto-assets has led to more mainstream acceptance.
We saw the UK’S Her Majesty’s Revenue and Customs (HMRC) weigh in on cryptocurrencies earlier this year by providing new UK guidance on the taxation of staking rewards and derivatives.
In the US, a 2021 bipartisan bill, which has a provision to levy taxes on digital currency transactions, imposed new tax reporting obligations on cryptocurrency brokers.
Such regulatory action has set the groundwork for cryptocurrencies to be considered a legitimate asset class.
In the UK roughly 2.3m adults are holding crypto-assets, up from 1.9m last year, according to data from the Financial Conduct Authority (FCA).
In November 2021, there were a 8.3m transactions on the Bitcoin network. Total fees incurred for all transactions on the Ethereum network that same month amounted to $1.82bn, a 34.6% increase from October 2021.
Other significant crypto developments include a Mastercard and Island Pay partnership this year that saw the launch of the world’s first central bank digital currency-linked card, along with news from PayPal in October 2021 of a new service that enables customers to buy, hold and sell cryptocurrency directly from their PayPal account.
And one of the world’s most well-known basketball teams, the Dallas Mavericks, announced this year that it will be accepting cryptocurrency payments for official merchandise and tickets.
The overall market capitalisation of all cryptocurrencies has grown from $500m in December 2012 to $782bn in December 2020, representing a compound annual growth rate (CAGR) of over 150%.
On 8 November, the cryptocurrency market soared to a new all-time high when it reached a global market capitalisation of $3tn for the first time, according to data from CoinGecko.
Best crypto investments of 2021
“This year has been an exciting one for cryptocurrency investors who have witnessed bitcoin hit two all-time highs, not to mention the rise of meme coins such as SHIB and DOGE, as well as lesser-known rising stars like LIGHT and XRDOGE,” Anndy Lian, chairman of BigONE Exchange and chief digital advisor for Mongolia’s national productivity agenda, told Capital.com.
“For example, a high performing crypto like AXS is seeing top players earning up to 1,500 smooth love potions (SLP) a day. It’s worth noting that Sky Mavis’s core revenue (the developer which created Axie Infinity and also raised $152m to help grow the game) is tied closely to AXS’s year-to-date performance.”
Let’s therefore take a look at the top five cryptocurrencies of 2021.
Shiba Inu (SHIB)
Shiba Inu is a meme currency created in August 2020 by the anonymous founder Ryoshi. It’s based on the Ethereum blockchain, like many other cryptocurrencies, but what stands out about the project is its declaration of being a …….