The rise of cryptocurrencies: Year in Review

The rise of cryptocurrencies: Year in Review
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Updated 09 January 2022

The rise of cryptocurrencies: Year in Review

The rise of cryptocurrencies: Year in Review
  • The year witnessed digital coins gaining global acceptance as legal tender

RIYADH: 2021 was a record year for cryptocurrency, which saw the market value for digital coins briefly top $3 trillion (SR11.3 trillion) in November.

Bitcoin, the largest cryptocurrency by market value and the second-largest cryptocurrency, ether, also hit all-time highs. While altcoins and the meme-inspired Dogecoin gained traction.

Other digital assets, such as nonfungible tokens, or NFTs, sold for millions of dollars alongside fine art in major auction houses. A digital collage by US artist Beeple sold at Christie’s for $69.3 million in March.

In addition to art, NFTs for use in video games to buy digital land or other items soared in value.

And El Salvador became the first country to accept Bitcoin as legal tender in September, in a move that saw the government provide digital wallets giving away $30 in Bitcoin to every citizen. 

HIGHLIGHT

El Salvador became the first country to accept bitcoin as legal tender in September, in a move that saw the government provide digital wallets giving away $30 in Bitcoin to every citizen.

Blockchain-based applications, including decentralized finance, or DeFi, garnered interest from both retail and institutional investors, pushing the growth of Web3, which is the decentralized version of the internet based on blockchain technology that powers NFTs and underpins cryptocurrencies.

All of this helped push cryptocurrency into the mainstream in 2021.

Here are the crypto highlights of 2021.

 

Most searched cryptocurrencies

Receiving an average of 1,100,000 Google searches per month, Bitcoin was the most Googled cryptocurrency in the UK in 2021, according to a new study.




A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken June 14, 2021. (REUTERS/File Photo)

Research conducted by Bacancy, a software firm, added that Dogecoin is the second most searched digital coin in the UK with a monthly average of 596,000 Google searches over the past year.

In third place with 378,000 searches is Ethereum, the blockchain-based software platform for receiving and sending value globally.

With 189,000 searches per month, the Shiba Inu token, another digital coin with a dog theme, was in fourth place.

Cardano is the fifth most-searched, with 187,000, followed by XRP in sixth place with 185,000 monthly searches and in seventh place is Ripple with 83,000 Google searches in 2021.




A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken October 19, 2021. (REUTERS/Edgar Su/File Photo)
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Meanwhile, Dogecoin has overtaken Bitcoin in popularity in the US in 2021 as it is the most searched cryptocurrency in the country’s 23 states, according to research.

This survey was conducted by financial adviser The Advisor Coach to establish the cryptocurrency each US might want to invest in based on searches.

Analysis of the Google Trends data revealed that Dogecoin had the highest number of states who were interested in investing in the digital coin with a total of 23 states, including Illinois, Florida, Hawaii and New Jersey. The rise in interest can be partially attributed to the endorsement of US billionaire Elon Musk who said in December that his electric carmaker Tesla would accept Dogecoin as a form of payment.

Bitcoin was the second most popular with 10 states looking up investments opportunities in cryptocurrency, including Connecticut, Alaska, Mississippi, and New Hampshire.

A total of eight states inquired into Ethereum, the third-highest spot in the research, with states such as Georgia, Louisiana, Virginia and Ohio showing an interest.

 

Who’s mining

Most Bitcoin mining took place in China, according to internet protocol, or IP, addresses that used the mathematical functions needed to search for the digital coin.

In 2021, the world’s top Bitcoin mining pools all came from China, with five pools being responsible for over half of the cryptocurrency's total hash, or mathematical mining functions. 




Cryptocurrency mining facilities are seen in Pristina, Kosovo. (REUTERS/Hazir Reka/File Photo)

This is likely related to energy prices around the world as the cost of electricity in Germany is more than 10 times the price in China. Successful mining for Bitcoin uses banks of high-powered computers that use a great deal of energy.

Digital coin mining companies bought a lot of hardware this year, which resulted in the price of some mining accessories jumping roughly 10 percent a week in 2021, according to Statista.

However, on the currency’s dark side, the US Internal Revenue Service revealed in November that $3.5 billion of cryptocurrency was seized last year.

This represents 93 percent of all funds seized by the criminal investigation unit during 2021.

The agency expects to confiscate billions more dollars in cryptocurrency next year.

“I expect a trend of crypto seizures to continue as we move forward into fiscal year 2022. We are seeing crypto involved in a number of our crimes as we move forward,” IRS Criminal Investigation Chief Jim Lee said.


Saudi Exchange kicks off single-stock futures trading, led by Aramco, stc

Saudi Exchange kicks off single-stock futures trading, led by Aramco, stc
Updated 16 sec ago

Saudi Exchange kicks off single-stock futures trading, led by Aramco, stc

Saudi Exchange kicks off single-stock futures trading, led by Aramco, stc

RIYADH: The Saudi Exchange has recorded over 30 trades as it introduced single-stock futures to the market on Monday, led by shares of oil giant Aramco and Saudi Telecom Co.

Aramco futures logged a trading volume of 20 so far with a value of SR76,200 ($20,304), while stc posted 10 trades worth SR97,700.

Saudi Kayan and Ma’aden contributed with one transaction each, valued at SR1,500 and SR5,100, respectively.

The launch of single-stock futures as Tadawul’s second derivatives product — after launching index futures in 2020 — comes amid efforts to bolster liquidity and lure investors into the region’s biggest bourse.

In addition to the aforementioned stocks, the first tranche of the contracts includes Al Rajhi Bank, Saudi National Bank, Alinma Bank, Saudi Basic Industries Corp., Saudi Electricity Co., and Almarai.


Egypt awaits Saudi PIF’s decision on investing in EGX-listed Egyptalum

Egypt awaits Saudi PIF’s decision on investing in EGX-listed Egyptalum
Updated 9 min 40 sec ago

Egypt awaits Saudi PIF’s decision on investing in EGX-listed Egyptalum

Egypt awaits Saudi PIF’s decision on investing in EGX-listed Egyptalum

RIYADH: Egypt is waiting for Saudi Arabia’s Public Investment Fund to make a decision on investing in the state-owned aluminum company Egyptalum by the end of the year, according to Hisham Tawfik, the minister of public enterprise sector.

Tawfik added that the investment includes increasing the company’s capital, rather than selling a stake, he told Asharq.

Talking about investments amounting to $300 million, the minister said it will rehabilitate the factory to produce efficiently for the next 20 years.


Rising fuel prices causing demand destruction, says Vitol exec

Rising fuel prices causing demand destruction, says Vitol exec
Updated 32 min 3 sec ago

Rising fuel prices causing demand destruction, says Vitol exec

Rising fuel prices causing demand destruction, says Vitol exec

RIYADH: The global surge in fuel price is starting to have negative effects on demand, according to a senior executive of the world’s biggest oil dealer.

Mike Muller, who is the head of Asia at Vitol Group, recently told a Dubai-based media Gulf Intelligence that consumers are being badly affected by the price hikes of gasoline, diesel and other oil products.

“There’s very clear evidence out there of economic stress being caused by the high prices, what some people refer to as demand destruction,” he said, Bloomberg reported.

Prices of refined fuels have hit an all-time high in several countries including the US, contributing to a rise in inflation.

The oil prices have risen as a fallout of the changing economic environment due to Russia’s invasion of Ukraine, coupled with supply-chain issues and a western ban on Russian fuel.

According to the latest updates, Brent crude is priced at $111.27 a barrel, while US West Texas Intermediate is priced at $108.09 a barrel.


India In-Focus — Shares slip; India to drop windfall tax if oil prices fall $40 a barrel

India In-Focus — Shares slip; India to drop windfall tax if oil prices fall $40 a barrel
Updated 04 July 2022

India In-Focus — Shares slip; India to drop windfall tax if oil prices fall $40 a barrel

India In-Focus — Shares slip; India to drop windfall tax if oil prices fall $40 a barrel

MUMBAI: Indian shares began the week on a tepid note on Monday, dragged by metal stocks due to demand worries and weaker sentiment in global markets.

The NSE Nifty 50 index was down 0.3 percent at 15,704, while the S&P BSE Sensex was unchanged at 52,930.86. The indexes rose about 0.3 percent each last week.

India to drop windfall tax if oil prices fall $40 a barrel

India will only withdraw its windfall tax introduced last week for oil producers and refiners if global prices of crude fall as much as $40 a barrel from present levels, Revenue Secretary Tarun Bajaj told Reuters on Monday.

The tax on firms that have increased product exports to gain from higher overseas margins took effect on July 1, as the government moves to boost domestic supply and revenue.

The taxes, and some accompanying export curbs, will hit the earnings of companies such as Reliance Industries, and Nayara Energy, which is partly owned by Russia’s Rosneft, the Oil and Natural Gas Corp., Oil India Ltd. and Vedanta Ltd.

“The taxation would be reviewed every 15 days,” Bajaj said, adding that it would depend on international crude prices. “If crude prices fall, then windfall gains will cease and windfall taxes would also be removed.”

The government believes such windfall gains will cease once prices fall to $40 from existing levels, Bajaj said.


China In-Focus — Yuan inches up; stocks rise; Evergrande canvassing creditors’ support

China In-Focus — Yuan inches up; stocks rise; Evergrande canvassing creditors’ support
Updated 04 July 2022

China In-Focus — Yuan inches up; stocks rise; Evergrande canvassing creditors’ support

China In-Focus — Yuan inches up; stocks rise; Evergrande canvassing creditors’ support

BEIJING: China’s yuan inched up against the dollar on Monday, underpinned by a narrowing US 10-year yield advantage versus its Chinese counterpart.

Currency traders and investors usually use the yield gap between the world’s two largest economies as a key indicator of the relative value of the two respective currencies.

The yield gap between the benchmark 10-year Chinese bonds and Treasuries narrowed to -3 basis points from roughly -15 bps last week, as US bond prices rose amid worries over a global recession.

In the forward market, the benchmark one-year dollar/yuan swaps bounced to a three-week high of -182.5 points, from -280 points on Friday.

Prior to market opening, the People’s Bank of China set the midpoint rate at 6.7071 per dollar, 208 pips or 0.3 percent weaker than the previous fix 6.6863.

In the spot market, the onshore yuan opened at 6.7010 per dollar and was changing hands at 6.6921 at midday, 99 pips firmer than the previous late session close.

Traders said the strength in the yuan on Monday also came as China’s central bank made the smallest daily cash injection through open market operations in one-and-a-half year, resulting in a net withdrawal of 97 billion yuan ($14.50 billion)for the day. 

Chinese stocks rise 

China stocks rose on Monday supported by healthcare shares and the launch of cross-border investment scheme ETF Connect, while Hong Kong shares slipped weighed by airline operators.

China’s blue-chip index CSI300 rose 0.7 percent and the Shanghai Composite index gained 0.5 percent. In Hong Kong, the benchmark Hang Seng index dipped 0.1 percent.

Evergrande canvassing creditors’ support 

China Evergrande Group is reaching out to its offshore creditors for their support to fight a lawsuit in a Hong Kong court aimed at liquidating the embattled property developer, according to a person with direct knowledge of the matter.

Evergrande, which is deemed to be in default on its nearly $23 billion of offshore debt and is working on a debt restructuring plan, aims to submit the backing of creditors as part of the evidence to the court ahead of the first hearing on the winding-up petition on Aug. 31, the person said.

Last week, Top Shine Global Ltd, an investor in Evergrande unit Fangchebao, said it had filed a winding-up petition against the developer as it had not honored a pact to repurchase shares from Top Shine in Fangchebao.

A successful outcome of the petition could impact the developer’s debt restructuring plan by diminishing the value of the overseas assets that are central to the interests of offshore creditors.

The developer was not considering an out-of-court settlement with Top Shine at the moment, the source said.

 

(With input from Reuters)