End of the Year 2021: Crypto and NFTs – A Bold Beginning or an Empty Hype

The year 2021 has gone on record as a big year for cryptocurrencies across the globe, with the total market capitalization of crypto assets touching an all-time high of $3 trillion in November. According to market research firm Chainalysis, 14 percent of Americans own crypto assets, while India has around 15 million crypto investors, making us the second largest country in the world.

The native bitcoin has dominated the market this year with growth of more than 60 percent, but also shares popularity with the likes of Ethereum and Binance Coin. Support for this disruptive technology by tech giants such as Elon Musk has also driven its development, including meme coins such as Dogecoin.

Growing Acceptance of Crypto

While the growth in trading and valuation has come after much volatility, acceptance of cryptocurrencies has seen a steady upward trend.

Iloilo City in the Philippines became the first city in the Asia-Pacific where three luxury residential properties were sold through cryptocurrencies such as bitcoin.

Back in India, a restaurant in Delhi became the first restaurant to accept payments in cryptocurrencies like Ethereum, Dogecoin, Bitcoin and more. The restaurant, Ardor 2.1, has come up with a creative idea for Indian thalis and dishes to entice customers by using catchy names and phrases from the crypto-verse.

From Bollywood icons to tech entrepreneurs, cryptocurrency has turned into the latest craze, with everyone looking to dive into the crypto world. Some even believe that cryptocurrencies, and the underlying blockchain architecture, will set off a new wave of financial innovation once adoption levels rise.


While regulatory uncertainty remains, the cryptocurrency has created a spin-off of its own. A non-fungible token (NFT) is a digital asset – a unique piece of digital life that has no copy and exists only in the digital world. Backed via blockchain and traded via crypto, NFTs took the art world by storm in 2021.

A piece of digital art by Beeple was sold via Ethereum in the form of NFTs for a staggering amount of $69 million, which does not actually exist in the real world.

The craze for OpenSea, the once obscure online NFT marketplace, has tripled business to a total of $10 billion within three months, when compared with e-commerce site Etsy. Traditional auction houses such as Christie’s are pioneers in NFT trading, reflecting a unique understanding between old money and new technology.

India’s crypto boom

Now, take a sample of this data. Venture capital funds have invested nearly $30 billion in cryptocurrencies, or a little more than a decade-old technology, compared to all previous years. According to transaction data compiled by Pitchbook Data Inc., this is nearly quadruple in the year since its previous high of nearly $8 billion in 2018, or more than 1,300 percent of bitcoin’s breakthrough.

With more young Indian investors exploring new investment options, cryptocurrencies have emerged as a major asset class. According to cryptocurrency research firm Chainalysis, the local crypto market exploded when the Supreme Court last year overturned a previous ban, which saw a 641 percent increase between 2020 and 2021, from $923 million in April 2020 to nearly $6.6 million in May 2021. Billion gone.

There are 15 domestic cryptocurrency exchange platforms in the country.

According to industry estimates, there are around 15 million to 20 million crypto investors in the country, with total crypto holdings of around Rs 45,000 crore (Rs 450 billion).

Bitcoin saw an average return of 66 percent in November and – along with cryptocurrencies MYNA, Dogecoin and Ethereum – traded the highest volume during the festive season of Diwali in early November.

Domestic platforms such as CoinSwitch Kuber and Coin DCX have intensified their outreach efforts with a vigorous social media campaign to promote crypto acceptance among a large user base and collaborations with celebrities such as film and cricket stars.

According to a report by trade association Nasscom, Indians are estimated to invest more than $10 billion in the cryptocurrency market by 2030.

Blockchain is the technology that enables the existence of crypto, among other things. According to a report by market research firm Research and Markets, around 56 percent of Indian enterprises are now adopting blockchain technology and making it a part of their core operations, with the industry estimated to be $241 million in India by 2030 and $2.3 billion by 2026. expected to reach. Globally, according to a report titled ‘Crypto Industry in India’ by Nasscom in association with WazirX.

Will cryptos turn into digital gold?

The authorities in India are struggling to regulate cryptocurrencies. RBI has reiterated its strong views against cryptocurrencies highlighting serious concerns for the country’s macroeconomic and financial stability and cast doubt on the number of investors trading on them as well as their claimed market value .

The Enforcement Directorate is investigating at least eight cases of cryptocurrency-related fraud.

Keeping in mind the rapidly changing dimensions in the virtual currency space, the government announced that it will introduce “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” to ban all private cryptocurrencies in India, however, with some exceptions. will allow it to be promoted. The underlying technology of cryptocurrency and its uses

Digital currencies on Indian exchanges soon fell at a discount of up to 25 per cent against their global counterparts amid panic selling on the day of the announcement.

The disruption caused by crypto compared to traditional currency is the main challenge for regulation by central banks. RBI does not classify legal tender and thus, does not accept or guarantee its monetary value. Its hesitation stems from the basic fact that unlike the rupee, the RBI does not control cryptocurrencies.

A privately created cryptocurrency is therefore a parallel and unregulated currency and would be opposed by any central bank, including the RBI. Therefore, the bill also aims to “create a facilitating framework for the creation of an official digital currency to be issued by the Reserve Bank of India”.

This will allow RBI to take advantage of the benefits of blockchain and allow Indians to trade in crypto while maintaining its regulatory framework. As is evident, the adoption of crypto by the government is also inevitable. While this will affect the fate of private cryptocurrencies, blockchain technology is here to stay.

Governments and regulators will have to evolve to accommodate disruptive technology, as has been the case in the past with ideas such as credit cards and online transactions.

Its authority over the economy and currency is non-violent and necessary and yet equally important to keep up with major changes in order to maintain competition and discourage the emergence of a parallel black economy.

The relationship between crypto, investors and regulators is just beginning.