The returns of the main cryptocurrencies in 2021
2021 saw the rise and maturity of the crypto markets, with different sectors flourishing and greatly outperforming the market leader, bitcoin.
While Bitcoin only managed to return 59.8% last year, the total market capitalization of the cryptocurrency sector grew by 187.5%, with many top coins offering four and even five-digit percentage returns.
2021 Crypto Market Summary
Last year was not only a great year for cryptocurrencies in terms of performance, but also for the increasing maturity of infrastructure and the resulting decorrelation of individual crypto industries and coins.
Crypto infrastructure has developed significantly, and there are now many more avenues for people to purchase altcoins that do not require buying and using. bitcoin in the process. As a result, many cryptocurrency prices were dictated more by the value and functionality of their protocol and applications than by their correlation to bitcoin.
|Ethereal||Smart contract platform||399.2%|
|Binance Coin||exchange token||1,268.9%|
|Solarium||Smart contract platform||11,177.8%|
|Cardano||Smart contract platform||621.3%|
|land||Smart contract platform||12,967.3%|
|avalanche||Smart contract platform||3,334.8%|
|Moles||Smart contract platform||187.9%|
Sources: TradingView, Binance, Uniswap, FTX, Bittrex
Bitcoin was not the only cryptocurrency to fail to achieve triple-digit returns in 2021. Litecoin and Bitcoin Cash also provided meager double-digit percentage returns as payment-focused cryptocurrencies were largely ignored for projects with smart contract capabilities.
Other older projects like Stellar Lumens (109%) and XRP (278%) provided triple-digit returns, with Cardano (621%) being the best performer of the old guard despite failing to ship its smart contract functionality. last year.
The Rise of Ethereum Competitors
Ethereum far outperformed bitcoin in 2021, returning 399.2% as bitcoin’s popularity grew NFT and the creation of DeFi 2.0 protocols like Olympus (OHM) expanded the possible use cases.
But with the rise of network activitya 50% increase in transfers in 2021, Ethereum gas rates From lows of $20 for a single transaction, to mint NFT prices starting around $40 and reaching into the hundreds on congested network days, the crypto retail crowd migrated to other smart contract platforms with lower fees.
Budding alternative smart contract platforms like Solana (11,178%), Avalanche (3,335%), and Fantom (13,207%) had 4-5 digit percentage returns as these protocols built their own decentralized financial ecosystems and NFT marketplaces .
With Ethereum set to merge with the beacon chain this year, which uses proof of stake instead of proof of work, we will see if 2022 brings lower gas fees and the return of retail to Ethereum if the merger is successful.
Dog Coins Meme your way to the top
While many new cryptocurrencies with strong functionality and unique use cases were rewarded with strong returns, it was memes that drove the biggest returns in crypto last year.
Dogecoin’s rise after Elon Musk’s “adoption” saw many other dog coins follow, with SHIB benefiting the most and returning a staggering 19.85 million percent.
But since Dogecoin went from $0.07 to a high of $0.74 in the second quarter of last year, the price of the original meme coin has slowly dropped -77% to $0.17 at the time of writing. Article. After last year’s roller coaster ride, 2022 started with a positive catalyst for Dogecoin holders as Elon Musk announced that DOGE can be used to buy Tesla merchandise.
Gamifying the cryptocurrency industry
The intersection between cryptocurrency, gaming and the metaverse became more than a pipe dream in 2021. Axie Infinity was the first native crypto game to successfully establish a play-to-win structure that combines its native token (AXS) and the NFTs in the game. becoming a sensation source of income for many in the Philippines.
Other crypto game projects like Defi Kingdoms are putting recognizable game interfaces into decentralized finance applications, with the decentralized exchange becoming the “marketplace” for the city and yield farms the “gardens” where the yield is harvested. This fantasy aesthetic is more than just a fresh coat of paint, as the project with $1.04 billion of the total value locked is developing an underlying game of making money.
Along with gamification, in 2021 crypto native and non-crypto developers put a heavy emphasis on the digital worlds or metaverses that users will inhabit. Facebook’s name change to Meta resulted in the two prominent metaverse projects The Sandbox (SAND) and Decentraland (MANA) rising another hundred percent to end the year with 16,261% and 4,104% return respectively.
With so many eyes on the crypto sector after the breakout year of 2021, we will see how the development of US regulation and changing macro conditions affect crypto in 2022.