Cryptocurrencies have been around for over 12 years now. Ever since the emergence of Bitcoin, the first and biggest cryptocurrency in 2009, the crypto market has expanded exponentially by leaps and bounds and has hit multiple milestones.
In this article, we explore some of the monumental events that have occurred in the crypto sphere over the past couple of years.
The Emergence of Bitcoin
The emergence of Bitcoin is undoubtedly one of the most important and monumental events in the field of Crypto. In 2008, A pseudonymous creator called, Satoshi Nakamoto published a white paper on a cryptography mailing list. A year later, in 2009, the first line of Bitcoin’s code was written. Whereas long before Bitcoin (BTCUSD) there were recorded attempts at creating digital and decentralized currencies, Bitcoin is considered by some to be the first original Cryptocurrency. Moreover, if not for Bitcoin, one could argue that the Cryptocurrency domain might look different than what it currently is. This Cryptocurrency has paved the way for its successors as many of the following Cryptocurrencies build on Bitcoin’s decentralized technology. Furthermore, its effect is irrefutable, since as of the time of this writing, Bitcoin has a market cap of $368 billion, the highest out of all the other currencies.
Ethereum, DeFi, and Blockchain
July 30th, 2015 was a huge milestone for the Crypto market. On that day, Ethereum (ETHUSD), the second-largest Cryptocurrency was launched. With the inception of the Ethereum network, smart contracts, and decentralized finance (DeFi) were introduced to the Crypto world. This is because while Ethereum builds on Bitcoin’s decentralization, it far surpasses its characteristics. Ethereum is a decentralized blockchain platform that secures application codes through what is called a smart contract which allows transactions without the need of a third party. Accordingly, Ethereum unlike Bitcoin has also ushered forth smart contracts, which support decentralized applications (dApps). Furthermore, as a payment platform, Ethereum is an open-source network that has led to the development of a myriad of innovative developments in the Crypto world like Initial Coin Offerings (ICOs), decentralized finance apps (DeFi), and stablecoins (coins that the value of which is tied to other currencies).
All in all, using blockchains like Ethereum allows for trustless, transparent, and immutable transactions, which are the core of decentralized finance. This is why Ethereum’s emergence is considered one of the most important events in the history of Cryptocurrencies.
Crypto as a Form of Payment
Crypto becoming a real-world form of payment can be traced back to 2010. On May 22, 2010, the first commercial transaction for Bitcoin was recorded. The story behind this transaction is truly one worth noting. That year, a developer called Laszlo Hayencz purchased two pizzas from Papa John’s for 10,000 Bitcoins. That day is one of the most significant events in Crypto history because it meant that Cryptocurrencies could be used for transactions and not only for investments. And according to many, this event, while it might have seemed mundane at the time, is what actually led to the growth of the crypto market as we know it today. Moreover, in 2010, the first Cryptocurrency exchange, bitcoinmarket.com (now defunct) kicked off.
Afterward, major companies and banks started accepting Crypto as a form of payment. For example, in 2014, tech behemoth, Microsoft (MSFT), announced that it would start accepting Bitcoin as a form of payment for its services and products, and as of the time of this writing, Microsft also owns a blockchain-based system called ION. That year, PayPal (PYPL) and Dell (DELL) among others also started accepting Cryptocurrency payments.
Financial Institutions' Crypto-Friendly Approach
This Crypto-friendly approach was also noted in more recent years in big bank companies. Last year, for example, Goldman Sachs (GS) started supporting trading Bitcoin futures and as of the time of this writing, in 2022, this multinational investment bank also grants clients access to Ethereum funds. Similarly, in 2021, JPMorgan (JPM) espoused the blockchain technology which is engrained at the core of Cryptocurrencies by creating a digital coin of its own, called JPM coin, to facilitate international payments. In addition, JPMorgan also launched a Bitcoin fund to its wealth management clients.
Other traditional banks like Morgan Stanely (MS), Deutsche Bank (DBK.DE), and BlackRock (BLK) have started accepting Cryptocurrencies and some banks are now preparing their functions to be more crypto-friendly. Since some deem Crypto to be a threat to the traditional financial sector as it is seen as an unorthodox currency, the fact that the aforementioned institutions have started to be more tolerant towards it is a huge milestone for the Crypto market.
Crypto Gets Scrutinized
As one could probably infer, Crypto’s history is not always rainbows and butterflies. As of late, the crypto market has irrefutably suffered, and some even refer to this downward spiral as the ‘crypto winter’. Bitcoin fell below $20,000 to almost $19,000 at the beginning of July and Ethereum fell below $1,000 in June.
Furthermore, this sector has been under the radar. For example, on June 15th, during a conference on climate change and technology, Microsoft CO-founder Bill Gates deemed Cryptocurrencies (and NFTs) to be “100% based on greater fool theory”. (Source:CNBC)
In addition, on July 5th, the Bank of England (BOE) mentioned in a report that it believes that the market will experience a sharp decline in the prices of risky assets like Cryptocurrencies. This can be attributed to the increasing market volatility and uncertainty exacerbated by factors like the war in Ukraine, COVID restrictions, inflation, and higher interest rates. In such cases, investors tend to shy away from assets like Cryptocurrencies and tend to seek shelter in safe-haven assets instead.
These remarks, coupled with a general Crypto retreat in the month of June 2022, show the intricate status Cryptocurrencies hold in the market. But whether these less-than-optimistic outlooks materialize is still unclear.