LIVEFACTORS THAT LED TO THE SURGE IN CRYPTOCURRENCY IN 2021
Certainly! There were several factors that contributed to the surge in cryptocurrency prices in 2021. Here are some of the key reasons:
- Increased institutional adoption:
Major financial institutions such as Tesla, Square, and MicroStrategy began investing in Bitcoin, which helped to legitimize the cryptocurrency and increase its value.
- Rising inflation:
As governments around the world printed more money to stimulate their economies during the COVID-19 pandemic, investors turned to cryptocurrencies as a hedge against inflation.
- Increased adoption by payment applications: Payment applications such as PayPal began accepting cryptocurrencies, which made it easier for people to buy and sell them.
- Interest in NFTs:
The rise of non-fungible tokens (NFTs) also contributed to the growth of the cryptocurrency market. NFTs are unique digital assets that are stored on a blockchain, and they became popular among collectors and investors.
- Decentralized finance:
Decentralized finance (DeFi) is a blockchain-based financial system that allows people to lend, borrow, and trade cryptocurrencies without intermediaries. DeFi grew in popularity in 2021, which helped to drive up the value of cryptocurrencies.
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