2021 in Charts

31 December 2021

Happy New Year — wishing a prosperous 2022 and another bull market!

#1 Cryptocurrency market cap (coinmarketcap) rose from $776bn at the start of the year to ~$2.2tn (2.83x). MarketCap reached its pico-top on 11/10, of ~$2.96tn.

#2 Bitcoin plays a smaller role now than it did at the start of the year; bitcoin dominance fell from ~71% at the start of the year to ~40%. The narrative that bitcoin = digital gold, ethereum = internet is widely accepted by many, and many thinks it’s a matter of time before ethereum marketcap overtakes bitcoin’s.

#3 Bitcoin’s market capitalization (~$1tn) still remains far from gold’s ($11tn), but has steadily been catching up, and overtook silver’s at one point.

#4 Bitcoin also made history as first bitcoin-linked ETF was launched in the US after SEC approval; ProShares’ Bitcoin futures ETF ($BITO) debuted on NYSE on 10/19. BITO hit $1bn in volume for first day of launch (inc. after-hours trading), becoming the #2 most actively traded ETF on opening day EVER. However, spot ETFs were promptly rejected thereafter.

#5 Top Performers of 2021. 2 sectors dominated: Gaming (Metaverse) and Smart Contract Platforms.

#6 Speaking of metaverse/gaming, it would not be an overstatement to say that 2021 was the year of NFT. Highest monthly sales volume prior to 2021 was ~$11mio; in Aug’20, monthly sales volume of NFT reached ATH of $2.05bn.

#7 NFT Marketplace volumes have gone through the roof together, but OpenSea dominated, as it printed ~$13bn in transaction volume for 2021.

#8 Together with rise by NFT activities on Ethereum, NFT activities on other chains also picked up.

#9 However, Ethereum dominance for NFT activities rose from 63% to 80% (+17 percentage points), a stark comparison to DeFi activities (covered later). Other notable beneficiary was Ronin, with the rise of Axie Infinity. In comparison, WAX and FLOW saw drop in market share.

#10 Top 10 NFT collection rankings by sales volume are as below. Out of the Top 10, 5 were minted this year (Bored Ape YC, Mutant Ape YC, Loot, Meebits, Cool Cats)

#11 And very recently, BAYC floor price flipped CryptoPunks! The debate of who should truly own NFT (the creators? or the NFT owners? ) became hottest debate in the Web3/metaverse space.

#12 Google search trends for NFT flipped Crypto and Bitcoin too! We can’t deny that we found trading NFTs is more “fun” than trading crypto.

#13 On the smart contract side, attractive incentive programmes announced by the platforms’ Foundations gripped market attention, and ‘Fat Protocol Thesis’ narrative took over, leading to L1 outperformance.

#14 TVL across smart contract platforms exceeded $240bn (1235% increase over $18.3bn at the start of the year).

#15 However, Ethereum lost DeFi TVL market share (97% to 63%) as its high transaction costs priced out a lot of the new entrants, and alternative L1s (Avalanche, Fantom, Near, etc.) offered juicy yields. In broader scheme of things, Terra (+7.2 percentage points of TVL market share) and Binance Smart Chain (+6 percentage point in market share) saw the greatest increase in TVL market share.

#16 However, on price-adjusted basis, $AVAX and $ONE saw the biggest TVL increase (from Jul’21)

#17 Another beneficiary of increase in DeFi/NFT activities was Metamask — its monthly active users have risen massively, boasting ~21 million MAUs (38x from 2020) according to its latest November fundraising round.

#18 But DeFi users (unique addresses that have interacted with DeFi protocols) still massively lag behind Ethereum addresses (#hopium).

#19 On the DEX side, DEX Trading Volume exceeded $1tn in 2021 (vs. 2020 $115bn). DEX trading volume peaked in May’21 ($163bn). However, DEX to CEX spot trading volume remains small (<10%), and well off the DeFi Summer highs. As traders, we don’t care as much about decentralization vs. transaction costs.

#20 CEX Trading Volume exceeded $14tn in 2021 (689% increase over 2020 $1.8tn). FTX, Binance, Bybit on the rise vs. Chinese exchanges (Huobi, OKEx) in decline, with Chinese regulators clamping down on trading activities (this time for real).

#21 On the DeFi lending side, outstanding loans on Top 3 lending protocols (Aave, Compound, MakerDAO) have increased from $8.2bn to $29.6bn. No drastic change in market share.

#22 A few prominent entrants have entered the lending space — Anchor and Abracadabra have seen incredible growth, backed by their own stablecoins (UST and MIM, respectively).

#23 And with great power comes great responsibility — cumulative funds stolen in DeFi exploits reached $716mio (830% increase from $77mio at the start of the year).

#24 Backed by greater institutional adoption and DeFi activities, stablecoin supply of Top 5 stablecoins exceeded $150bn (476% increase over 2020’s $27bn).

#25 Within stablecoins, USDT market share fell (from 78% to 51%) with continued Tether FUD, with increasing chatters of stablecoin regulation/clampdown (e.g. Working Group on Financial Markets), algo-stables are seeing greater adoptions — case in point, UST (1% to 7%).

#26 More on Ethereum — EIP-1559 has successfully been implemented in August with London hardfork, resulting in slowing down of ethereum circulating supply inflation.

#27 EIP-1559 has helped reduce ether net issuance by 66%.

#28 We even saw negative net issuance days and weeks (one week in October)!

#29 However, L2 adoption failed miserably, as TVL on L2 remains very small ($5.54bn). We expect some of the L2s to drop tokens to gain adoption.

#30 But what failed even worse than L2 is bitcoin! Bitcoin’s active addresses are in clear downtrend, while Ethereum is the opposite.

#31 As a result of the above, it’s been a bumper year for Ethereum miners.

#32 But of course, it’s nowhere close to PoS networks and the growth of validating/staking economy. With Ethereum’s transition from PoW to PoS, the ratio is gonna be skewed even more.

#33 Other thing that captured market attention was rise of memecoins, as we saw names like ShibaInu, Safemoon, etc. Shiba ($SHIB) even briefly overtook $DOGE in terms of market cap. Of course, the rise of memecoin was a precursor to precipitous market drop (bubble indicator).

#34 Other thing that gained traction was Olympus Forks {3,3}, across various smart contract platforms, including Wonderland, KlimaDAO, Snowbank, InvictusDAO, just to name a few. Most notably, Wonderland’s treasury overtook OlympusDAO’s!

#35 To wrap up, we also saw falling correlation within crypto — a sign of a maturing market! Best hedges were things like memecoins (DOGE) and OHM forks.



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