1. Bitcoin surpassed $1 trillion in market value for the first time
On February 19, bitcoin hit $1 trillion in market value for the first time. The milestone came after major institutional investors and notable financial companies began to support the cryptocurrency earlier in the year. Companies including $Tesla(TSLA.US)$, $Block(SQ.US)$ and $MicroStrategy(MSTR.US)$ started to use their balance sheets to buy bitcoin.
Learn More: Elon Musk says bitcoin seems high after surpassing $1 trillion market cap
2. Interest in NFTs exploded after Beeple's $69 million sale
When Mike Winkelmann, the artist known as Beeple, sold his piece called "Everydays: The First 5000 Days" as an NFT in March. This sale prompted mainstream coverage of NFTs that wasn't seen before.
The sale made Christie's the first major auction house to sell a fully digital, NFT-based piece of artwork. Also for the first time, Christie's allowed ether as payment for the artwork's principal price. And the $69.3 million sale price for the NFT was record-breaking at the time.
3. Elon Musk contributed to dogecoin's record high
In May, just before Elon Musk made his "Saturday Night Live" debut, the price of dogecoin began to spike. On May 8, the day of Musk's SNL appearance, dogecoin hit an all-time high of about 73 cents, according to Coin Gecko. But its price quickly retreated from that peak. As Musk appeared on the show, dogecoin fell as much as 29.5% and dropped to 49 cents at one point. This was representative of the roller-coaster run that dogecoin had all year, most of which had to do with Musk.
Learn More: What's behind Dogecoin's price movement?
4. El Salvador adopted bitcoin as legal tender
In June, El Salvador passed a new law to adopt bitcoin as legal tender, becoming the first country to do so. The law allows bitcoin to be used as payment for goods and taxes in El Salvador. Businesses can price their goods in bitcoin, and exchanges will not be subject to capital gains tax, CNBC reported.
Learn More: Bitcoin retreats from the highest level since May as El Salvador adopts it as legal tender
5. Ethereum launched EIP-1559 and prepared for the merge to Eth2
In August, a major upgrade to Ethereum went live. The upgrade, called London, included Ethereum Improvement Proposal (EIP) 1559, which changed the way transaction fees, or "gas fees," are estimated. It also started the reduction of ether's supply. Eth2 will be hugely impactful, since it will change the Ethereum infrastructure and ultimately make mining obsolete.
6. Over $600 million was initially stolen in a record DeFi hack
In August, DeFi platform Poly Network was hacked. Initially, over $600 million was stolen. Experts said that the hacker was able to exploit an issue within the network's code. Though the hacker ultimately returned the stolen funds, it was one of the biggest cryptocurrency thefts ever.
Learn More: Hackers steal $200M worth of tokens from Bitmart Exchange
7. The first U.S. futures-based bitcoin ETF launched
In October, the ProShares futures-based bitcoin ETF made its market debut on the New York Stock Exchange under the ticker "BITO." The ProShares bitcoin futures ETF saw one of the "biggest first days on record for ETFs," CNBC reported.
Learn More: The first U.S. Bitcoin ETF marked the crypto funds market explosion in 2021
8. The first bitcoin upgrade in four years activated
Taproot, a highly anticipated upgrade to bitcoin, went into effect in November. It was bitcoin's first major upgrade since 2017. Taproot introduced what's called Schnorr signatures, which help bitcoin transactions become more private and efficient, and less expensive. Most important, the upgrade better enables bitcoin to execute smart contracts, or collections of code that carry out a set of instructions on the blockchain.
9. Lawmakers focused on regulation as crypto lobbyists emerged
Throughout the past year, there's been a heightened focus on cryptocurrency regulation. Securities and Exchange Commission (SEC) chairman Gary Gensler was outspoken in his push to create regulatory framework for the cryptocurrency space. Federal Reserve chair Jerome Powell and Treasury Secretary Janet Yellen both repeatedly warned against cryptocurrency, particularly stablecoins, calling theentire asset class volatile and speculative.
In November, President Joe Biden signed the bipartisan infrastructure bill into law, which includes tax reporting provisions that apply to digital assets like cryptocurrency and NFTs.
10. Ethereum competitors earn market share
As demand for Ethereum, the most used blockchain network, surged this year, other projects emerged in an attempt to compete. As a result of competitors such as these, the total value locked (TVL) on DeFi increased seven times year-over-year, surpassing $200 billion, DappRadar reported. However, almost 60% of the TVL still remains on Ethereum.
11. DAOs enter the mainstream
In November, DAOs, or decentralized autonomous organizations, caught the attention of mainstream media after ConstitutionDAO raised over $40 million to buy a rare copy of the U.S. Constitution at auction.
Though billionaire Ken Griffin, CEO of hedge fund Citadel, outbid ConstitutionDAO, it brought attention to DAOs, which were previously only known by the crypto community, to the masses and gave a glimpse of what innovations may come in 2022.