Bitcoin Went Mainstream in 2021. It's Just as Volatile as Ever

Cryptocurrency trader Stephane Ouellette has a special alarm that sounds whenever digital-asset prices post sudden outsize declines. That alarm blared at 2:30 a.m. on Saturday, Dec. 4, when Bitcoin fell 20% in a matter of minutes—and once Ouellette woke up, he never went back to sleep.

Ouellette was busy long into the next afternoon, dialing up his teammates and checking on prices even as the market settled down. It wasn’t the first time this year that he had to log such long weekend hours as a result of a sudden Bitcoin slump. And chances are, his alarm will come in handy again soon.

“The market is still deciding whether this is going to be an alternate financial system or if it’s some kind of a scam,” said Ouellette, the chief executive and co-founder of Toronto-based institutional crypto platform FRNT Financial Inc. That makes parsing Bitcoin’s path “a volatile and uncertain exercise.”

By all accounts, 2021 was a momentous year for Bitcoin, its 13th since the cryptocurrency’s white paper introduced it to the world. Like other teenagers, Bitcoin hit something of a growth spurt: It acquired new friends, started new hobbies and in some places even became legal. But that doesn’t mean it has come of age.

For much of the year, Bitcoin soared, reaching new highs as droves of at-home traders, hedge fund managers and Wall Street stalwarts piled in and El Salvador became the first country to adopt it as an official currency. A futures-based Bitcoin ETF, long sought by investors, finally launched, attracting gobs of cash. All the while, a whole crypto economy based on blockchain technology popped up, helping to reshape the world of arts, sports and gaming.