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A Year in Review - Bitcoin & Its Regulation Over 2021 (Part 2)

The 4th quarter of the year was one of the most interesting quarters for the flagship cryptocurrency token since its existence.

*Note: Read the first part of Bitcoin’s journey from Q1 to Q3 in our article here.*

SEC’s ETF Approval Blows The Roof

Despite plenty of firms applying for a Bitcoin-based Exchange Traded Fund (ETF) in the United States through the history of BTC, the first approval from financial regulators came through only in Q4 2021. 

The United States Securities and Exchange Commission (SEC) announced via a notice on October 15 that the regulators have accepted the registration request for the Valkyrie’s Bitcoin Strategy ETF shares to be listed on the NASDAQ exchange. 

As previously reported by BSC News, the listing was approved by the exchange later on the same day.

Source

At the same time, the SEC also approved the registration of the shares of the ProShares Bitcoin futures-based ETF to be listed on NYSE Arca. The Proshares Bitcoin Strategy ETF became the first crypto-based ETF to launch in the U.S. on October 19. 

The ETF went to record volumes of over $1 billion in the very first day, which could even be the most successful ETF performance of all time in terms of ‘natural volume,’ as mentioned by Eric Balchunas, senior ETF analyst at Bloomberg, in a Twitter post.

The ETF approvals from the SEC led to the price of BTC going part $60,000 again on October 15. Furthermore, the listing of the ProShares ETF drove the price of the token even higher to $66,930 on October 20. 


Landmark Update For BTC 

Soon after the major ETF development and leading up to the Bitcoin Taproot Upgrade, amid several positive developments of institutional adoption and acceptance led to the token hitting its all-time high of $68,789.93, per data from CoinMarketCap. 

The token simultaneously hit a market capitalization of $3 trillion and is the token’s highest price attained to date.

Source: Bitcoin Q4 Price Trend

The Taproot upgrade was the landmark moment for the Bitcoin network as it was the first update to the network since the Segregated Witness (SegWit) upgrade four years ago. The previously launched SegWit upgrade brought about the launch of the Lightning Network in 2018. 

The Taproot Upgrade that went live at 04:10 UTC on November 14 added two main features to the network: Merkerlized Abstract Syntax Tree (MAST) and Schnorr Signatures. The combination of the two pushes censorship further by masking whether a certain transaction is using a MAST structure, which improves the privacy and the anonymity on the network.


Bleak End of Year as S2F Model Could’ve Been Invalidated

The end of the year didn’t turn too well for the flash cryptocurrency token in terms of price and market capitalization, at least. Post the Taproot upgrade on November 14, the BTC’s price took a downturn and soon lost the $60,000 resistance level and dropped to the $58,000 range by the end of November.

Source: PlanB’s Stock-to-Flow Model

During the first weekend of December, Bitcoin suffered a price flash crash that led to the token exchanging hands for as low as $41,967.5, making it 40% cheaper than its all-time high in November. Even though the token regained the $50,000 level during the holidays leading to the end of the year, it has since suffered another price loss and currently trades in the $43,300 range. 

This price trend has led to the inevitable questioning of the Twitter user, PlanB’s infamous Stock-to-Flow (S2F) model that put the price of BTC above $100,000 by the end of 2021. 

However, Bitcoin and the community are proving their resilience with a range of positive developments ranging from battling adversities like the drop in mining hash rate due to the political unrest in Kazakhstan to innovations like the launch of BTC ETFs in a high demand market like India.

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