The year is drawing to a close and we look back. How the Gamestop Movement Spilled into the Crypto Verse and Ripple Fought the SEC.
Can’t stop, won’t stop, Gamestop: From the share hype to the crypto space
While the BTC price rose to new heights at the beginning of the year, a storm was brewing elsewhere that should shake the investment world a little bit. We’re talking about the Reddit forum / r / wallstreetbets and its self-proclaimed investment monkeys (Apes)who had set themselves nothing less than to bring down Wall Street. Or at least shake it up a bit – and fill your pockets in the process.
By concertedly buying up GME shares, they drove the price so high that they triggered short sales of hedge funds. This was followed by a short squeeze, which ultimately led to Melvin Capital, one of the hedge funds that had bet against the Gamestop share, going bankrupt. Within a year, the GME rate had risen from just under 3 US dollars to 428.85 on January 28, 2021 as a result of this promotion. An increase of over 15,000 percent.
The David versus Goliath mentality also caught on in the crypto space. This is how the investor community was formed / r / satoshistreetbets out, which was dedicated to the crypto market. The hype about Memecoins really took off after the Gamestop campaigns. Not only did the Dogecoin experience an impressive rally, but also encouraged the crypto space to lift new memecoin projects from the blockchain. In the middle of the year, the Shiba-Inu-Coin attracted more attention.
But whether it is Shiba Inu, Doge or one of the numerous other Memecoins: Ultimately, they are all purely speculative and damage the image of the crypto space.
The Neverending Story: Ripple Vs SEC
It’s been a tough year for Ripple. Because the US Securities and Exchange Commission (SEC) had sparked a legal dispute at the end of 2020 that should drag on through the entire year 2021. The stock exchange supervisory authority put the fintech company under the control of trading in unregistered securities. The worrying prospect of fines amounting to 1.3 billion US dollars sent the XRP course on a downward slide as a result. The lawsuit also had other consequences. About by Binance stopped XRP trading without further ado. At the latest after the asset manager Grayscale had also discontinued the XRP fund, it was clear: This will be a difficult year for the Californian fintech.
Ripple didn’t want the butter to be taken off the bread so quickly, however. Rather, the company went on the offensive in March. In a letter to the US federal judge, it said that Ripple would consider the action of the stock exchange regulator to be a “regulatory abuse”. The SEC quickly thwarted Ripple’s rebellion.
At the end of November, Ripple struck again, but this time much more moderately. A document on possible regulation benevolently states:
The US financial markets are considered first class. This is partly due to the existing regulatory framework under which they operate. We believe that if this framework is successfully adapted to some of the unique characteristics of cryptocurrencies, it can provide the clarity that innovators seek. And consumers get the market protection they deserve.
With this in mind, Ripple called for “innovation sandboxes” to be promoted in order not to unnecessarily slow down developments in the crypto sector. A final decision is still pending.
ETH: the stony road to Proof of Stake
ETH has had a wild year. And that’s not just due to the all-time high of the Ether price of $ 4,878 on November 10th. With the first ETH ETFs from Canada, which hit the market in May, important foundations were already laid in relation to ether investments. But technically, too, progress was made.
On April 15th, the network carried out the first of three hard forks with “Berlin”. In doing so, the network lowered gas charges and introduced a new type of transaction. The so-called “Envelope Transactions” allowed users from now on to create future, complex transactions in order to lower gas fees.
After that, it was above all the ETH hard fork “London” on August 5th that gave the project a new impetus. Above all, the update brought about an adjustment of the fee policy and a reduction in the amount of available ether in circulation. With the improvement proposal EIP-1559, the developers introduced an algorithmically determined basic fee. The base fees should also be burned in the course of the update. This also led to the fact that on September 6th, for the first time, more ether was burned than was produced in one day.
On October 28th, we received the message that the third ETH update in 2021 was also successful. On the one hand, “Altair” introduced light client support. The light clients can synchronize with validators in the network. You can also run it on mobile devices. As a second innovation, Altair introduced the slashing function, which allows action against inactive or abusive validators.
These three updates initially gave hope that ETH 2.0. actually went ahead. But on December 11th – in ETH time at block number 13,773,000 – the developer community then shifted down a gear. The “Arrow Glacier” upgrade postponed the ignition of the Difficulty Bomb by a few months. As of now, that means that ETH 2.0. will have a firm footing until the middle of next year.
NFT hype: when the crypto-pixels exploded
The hype about non-fungible tokens (NFT) reached its peak in 2021. The unique, non-interchangeable collectibles started with fun projects that are now worth millions. The people behind projects like Cryptokitties or Cryptopunks A few years ago they could hardly have guessed what insane hype they would unleash with their blockchain-based pixel images.
When Larvalabs started with the randomly generated 10,000 cryptopunks in June 2017, the crypto market was still mainly busy with the ICOs. BTC had just broken the $ 2,000 mark, while Ether hit its all-time high of $ 363 on June 19. Almost four years later, on January 23, 2021, the most expensive crypto punk to date went over the digital counter. The alien changed hands for a mere 605 ethers (at that time US $ 761,888.57).
Over the course of the year, more and more celebrities, artists: inside and free riders jumped on the hype train. In April Eminem started their own NFT series with the “Shady Coin”. But it should not stay with Pixelart à la Cryptopunks. In November, Christies auction house auctioned a 3D animated astronaut by NFT artist Beeple. The fact that you can change this work of art even after its creation and adapt it to world events obviously makes it valuable. Venture capitalist Ryan Zurrer let $ 28.9 million jump for the Beeple work – but this is only the second most valuable NFT work of art Beeples, because his “Everydays: The first 5,000 Days” brought in 69 million US dollars in an auction.