In this article, we discuss the 10 best performing cryptocurrencies of 2021.
2021 was a booming year for cryptocurrencies, with the total market cap growing by 187.5%, and multiple top crypto coins providing four and five-digit returns at the end of the year. 2021 was not only the year of attractive crypto gains, but the period also saw evolving blockchain infrastructure and stability in the coins. The decentralized finance systems also expanded their functionality in 2021, in addition to non-fungible tokens increasing the user traffic on crypto trading platforms.
Millennials and Gen Z gave into the crypto and NFT frenzy, and the growing demand sent the prices soaring in 2021. Ethereum, which is the underlying blockchain platform for multiple NFTs, hit its all-time high of approximately $4700 in November 2021, while Bitcoin around the same period was priced at roughly $66,000. Mikkel Morch, executive director at crypto hedge fund ARK36, stated back in November that Bitcoin’s $70,000 price mark now “seems imminent”.
CME Group Inc. (NASDAQ:CME), a prominent and diverse American derivatives marketplace, announced at the beginning of December 2021 that it will launch Micro Ether Futures, which would expand its cryptocurrency derivatives offerings and mark its second micro cryptocurrency product for 2021. CME Group Inc. (NASDAQ:CME)’s Micro Bitcoin Futures, launched in May 2021, were wildly popular among investors and millions of contracts were traded. Institutional investors were the primary audience for these derivatives.
The cryptocurrency craze engulfed not only retail investors, but everyone from high-profile celebrities to prominent businessmen dabbled in the crypto market in 2021. Apple Inc. (NASDAQ:AAPL) CEO, Tim Cook, announced on November 9 that he personally owns crypto and has been interested in the concept for a while now. He stated that while the possibility of Apple Inc. (NASDAQ:AAPL) accepting crypto payments was out of the question, he personally believes that cryptocurrency is a good way to diversify a portfolio. Major companies like Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and PayPal Holdings, Inc. (NASDAQ:PYPL) embracing cryptocurrencies will also provide further growth catalysts for cryptocurrency as a whole.
2021 was dubbed as the ‘Year of Crypto’, and it was revealed in a survey by Cardify that investors in 2021 were putting more of their money on crypto as compared to traditional stocks. On average, $263 was allocated by investors to accounts dedicated to coins, whereas the average for stock brokerage deposits equaled $250. Despite the crypto crash in 2022, the performance of cryptocurrencies in 2021 cannot be ignored. Let’s take a look at the top performing cryptocurrencies from 2021.
Our Methodology
We selected prominent cryptocurrencies that had the highest gains in 2021, and despite the crypto crash of 2022, remain visible in the investing circles. We calculated share price gains for 2021, ranking the cryptocurrencies from lowest to highest gains.
Best Performing Cryptocurrencies of 2021
10. Ethereum (ETH)
Gain in Price in 2021: 404.21%
Ethereum was initially released in July 2015, and was written originally by the Russian-Canadian programmer, Vitalik Buterin, who conceived the idea in 2013. Ethereum is a decentralized, open-source blockchain platform that provides decentralized finance applications which eliminate the need for financial services intermediaries including brokerages, exchanges, and banks, and Ether (ETH) is the native cryptocurrency of the platform.
Ethereum also enables the creation and exchange of non-fungible tokens, and has allowed for upgrades that enhance transparency in transactions. The proof-of-stake model of Ethereum will be launched in the first half of 2022. ETH in 2021 gained 404.21%, making it one of the best performing cryptocurrencies of 2021.
In addition to facilitating multiple cryptocurrencies on its platform, Ethereum also offers decentralized smart contracts, which is an application on the platform allowing traditional contracts to be converted into digital agreements. In September 2021, there were around 117.5 million ETH coins in circulation.
JPMorgan Chase & Co. (NYSE:JPM) announced in February 2019 the launch of JPM Coin, a digital coin designed to make instantaneous payments using blockchain technology, and the US bank reported using Enterprise Ethereum for its digital coin. This boosted the credibility and market interest in Ethereum.
Ethereum has the potential to become a widely accepted payment method in the future, but for now, individuals and businesses alike primarily stick to payment systems provided by Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and PayPal Holdings, Inc. (NASDAQ:PYPL).
9. Cardano (ADA)
Gain in Price in 2021: 647.29%
Cardano is an open-source, decentralized blockchain platform that offers proof-of-stake to users, which is an easier way to establish trust between users and the blockchain platform than the proof-of-work algorithm relied upon by Bitcoin. Cardano (ADA) was launched in 2017, and was considered to be one of the Big Three crypto coins alongside Ethereum and Bitcoin.
On September 12, 2021, the Cardano ‘Alonzo’ hard fork officially launched, allowing smart contract functionality into the blockchain, in addition to native decentralized applications to be built. ADA exceeded the $3 mark and hit an all-time high of $3.101 on September 2, in anticipation of the Alonzo launch.
The cryptocurrency returned 647.29% in 2021, and Cardano plans to onboard approximately 50 banks and 10 fortune 500 companies in the next five years.
8. Binance Coin (BNB)
Gain in Price in 2021: 1249.80%
Binance Coin was launched in 2017, and its underlying blockchain platform, Binance, is the largest global cryptocurrency exchange. Binance has grown to be the leading crypto exchange in a number of countries.
In January 2019, Binance announced that it had partnered with Simplex, which is an Israeli licensed financial institution enabling cryptocurrency purchases with debit and credit cards, including Visa Inc. (NYSE:V) and Mastercard Incorporated (NYSE:MA). BNB returned 1249.80% in 2021 and was one of the best performing cryptocurrencies during the year.
7. Avalanche (AVAX)
Gain in Price in 2021: 2885.51%
Avalanche is a decentralized blockchain platform that enables smart contracts, with AVAX being the native cryptocurrency associated with Avalanche. Avalanche was launched on September 21, 2020. AVAX returned 2885.51% in 2021.
On November 22, 2021, AVAX was considered to be the tenth most valuable cryptocurrency, with a market valuation of $31.5 billion at the time. Avalanche’s deal with Deloitte helped garner renewed enthusiasm in the coin and its underlying technology.
Deloitte announced that it would collaborate with Ava Labs, the firm that developed Avalanche, to use Avalanche’s blockchain to support Deloitte’s work with the Federal Emergency Management Agency (FEMA), to build improved disaster relief platforms.
6. Dogecoin (DOGE)
Gain in Price in 2021: 2899.12%
DOGE was considered to be the first meme coin, launched by software engineers Billy Markus and Jackson Palmer, who created the payment system in 2013 as a mockery of the wild speculation surrounding cryptocurrencies at the time. Meme coins made their way to the top of the crypto market in 2021, with DOGE returning 2899.12%.
Tesla, Inc. (NASDAQ:TSLA)’s Elon Musk has been a vocal supporter of Dogecoin since 2019.
On December 14, Musk announced that Tesla, Inc. (NASDAQ:TSLA) would accept DOGE for some of its merchandise. DOGE traded 18.9% higher following the billionaire’s tweet.
The Dallas Mavericks, AirBaltic, BOTS, Inc., Post Oak Motor Cars, and Newegg are some of the renowned companies that accept DOGE as a payment medium as of 2021. However, DOGE has not become a widely accepted method of payment yet, unlike Mastercard Incorporated (NYSE:MA), Visa Inc. (NYSE:V), and PayPal Holdings, Inc. (NASDAQ:PYPL).
5. Solana (SOL)
Gain in Price in 2021: 9155.43%
Solana is a public blockchain platform that uses proof-of-stake and proof-of-history mechanisms that enable reliable and scalable DeFi transactions without compromising on decentralization and safety. Solana was launched in March 2020. The platform’s native token is called SOL.
Solana, which returned 9155.43% in 2021, allows incredibly short processing times and lower fees as compared to market rivals. SOL has attracted a lot of interest from small-time users, enterprise customers, and institutional investors.
The launch of the Degenerate Ape NFT on August 16, 2021 sent SOL’s price soaring, which primarily occurred due to higher developer activity on the Solana ecosystem. SOL’S price reached an all-time high of $216 on September 9, 2021.
On June 24, 2021, Swiss-based firm Digital Assets AG announced that it will tokenize multiple stocks such as Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG) on the Solana network, which increased the buzz around the coin.
4. Fantom (FTM)
Gain in Price in 2021: 12958.61%
Fantom is a fast, highly scalable open-source blockchain platform used for trading digital assets and providing decentralized finance services to developers. The Fantom platform uses a unique in-house consensus algorithm, and has allowed transaction speeds of under two seconds to developers. The native cryptocurrency of the blockchain platform is FTM.
Users of Crypto.com, a main portal allowing an entry point to digital assets for a worldwide community of over 10 million users, can purchase FTM with more than 20 fiat currencies, and spend the crypto at approximately 60 merchants globally via the Crypto.com Visa Card.
The total supply of FTM is 3.175 billion tokens, of which 2,134,638,448 FTM are currently in circulation, with the remaining coins subjected to gradual release through 2023. What sets FTM apart from other crypto is its unique mechanism, which allows considerably higher capacity and two-second transaction, in addition to superior security as compared to traditional proof-of-stake mechanisms.
FTM is also compatible with Ethereum and Binance Coin standards, in addition to its own Fantom OPERA tokens running in circulation. In 2021, FTM was one of the top performing cryptocurrencies of the year, offering a 12958.61% return.
3. Terra (LUNA)
Gain in Price in 2021: 13061.37%
Terra is a blockchain platform using stable-coins to create payment systems that are globally accessible, offering price stability and adoption of fiat currencies, as well as fast and affordable settlements. Terra was launched in April 2019, and Terra’s native token, LUNA, stabilizes the price of its stablecoins. LUNA has the functionality of a governance token, since its owners can submit and vote on government proposals. As of 2021, LUNA gained 13061.37%, and was one of the top crypto performers for the year.
Terra is largely supported by the Terra Alliance, which is a group of businesses and platforms endorsing the adoption of Terra and LUNA. In February 2019, Terra reported that e-commerce platforms from 10 countries were members of the alliance, which represents approximately 45 million users.
The Terra blockchain is secured with a proof-of-stake consensus algorithm, and there is a supply of 1 billion LUNA tokens available. In case users need more LUNA, the token is burned until it meets the demand, to maintain the price of Terra stablecoins.
2. Polygon (MATIC)
Gain in Price in 2021: 14105.50%
Polygon is a platform for Ethereum scaling and infrastructure development, allowing developers to build a multi-chain system that provides the advantages of Ethereum’s security and reliability. The native token for Polygon is MATIC, which secures the platform and allows due governance. MATIC runs as an Ethereum token.
Polygon is supported by Binance and Coinbase, and was created with the idea of enabling large adoption of cryptocurrencies by addressing scalability issues on multiple blockchains.
Polygon is structurally designed to support different decentralized finance protocols available in the Ethereum ecosystem, and uses a customized version of the Plasma framework, which is built around the proof-of-stake consensus mechanism. In addition to the PoS checkpoints, Polygon uses block producers to achieve increased decentralization, which also enhances the platform’s fraud-proof mechanisms.
MATIC tokens are released on a monthly basis, and the currently circulating supply is more than 4.8 billion tokens. Polygon offers a maximum capacity of 10 billion MATIC tokens.
1. The Sandbox (SAND)
Gain in Price in 2021: 15702.26%
The Sandbox was launched in 2011 as a platform supported by blockchain, where users can create, buy, and sell digital assets in a gaming format. The Sandbox offers a vibrant gaming community, with a decentralized platform that is powered by decentralized autonomous organizations and non-fungible tokens. The native SAND token allows for transactions on the platform, whose goal is to integrate blockchain into the gaming world. There is a maximum total supply of 3 billion SAND tokens.
The Sandbox has received endorsements from big shots in the gaming industry, including brands like Atari, Helix, and CryptoKitties. Leveraging user generated content, the Sandbox is building a metaverse where players enable further development of the platform.
The Sandbox is created on top of the Ethereum blockchain, which means that it is secured by the proof-of-stake consensus mechanism. SAND was one of the top gainers in the crypto world in 2021, returning 15702.26%.
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Disclosure: None. 10 Best Performing Cryptocurrencies of 2021 is originally published on Insider Monkey.
