2021 has been a big year for cryptocurrencies. The total market cap of cryptocurrency reached $3 trillion in 2021, according to a report by PitchBook Data.
The rise in market cap came as venture capital funds across the world invested about $30 billion into cryptocurrency in 2021 (till December 15). This was more than the total of all the investments made in the previous years in this decade-old technology. The second-biggest year for crypto investment was 2018 when $8 billion was invested in this digital currency.
Out of this $30 billion investment in cryptocurrency in 2021, about $7.2 billion were raised by US-based venture capitalists. The biggest transactions that led the crypto investment to touch the $30-billion mark were — a $1-billion funding raised by crypto derivatives exchange FTX; Custodian New York Digital Investment Group raising $1 billion; blockchain integration tool-provider, Forte, closing a $725-million funding; MoonPay securing a funding of $555 million; and NFT platform Dapper Labs raising $350 million, among others.
The massive rise in crypto investments comes despite the negative momentum after China started a regulatory crackdown on virtual coins. According to crypto experts, the emergence of niche sectors such as NFTs led to a sharp rise in investments.
A September survey by Cardify revealed that crypto investors put an average of $263 into accounts dedicated to coins which is more than the average $250 they put in traditional brokerages.
Meanwhile, crypto investments have spiked in India as well. While there are no concrete figures, industry experts suggest there are 15-20 million crypto investors in the country with a total crypto holding of around Rs 400 billion. According to a report prepared by blockchain data platform Chainalysis, Indiaranks 11th out of 154 nations in terms of cryptocurrency adoption.
This is despite reports that the Indian government is planning to ban private cryptocurrencies and introduce legislation to regulate digital currency. Some experts suggest that crypto investments shot up in the wake of the COVID-19 pandemic when traditional assets like currencies, bonds and equities became volatile.
Source: CNBC TV